It made up for the disappointments of bids by Birmingham and Manchester in 1992, 1996 and 2000.
But enthusiasm was tempered once it became apparent that a great amount of work and investment was required before the Games kicked off on July 27, 2012.
Increasing costs and a diversion of funds are overshadowing the promised benefits of urban regeneration and boost to businesses.
A brief history
The 1948 London Games, which were held primarily at the Wembley Stadium, were the first Olympic celebration after World War II and the first to be broadcast on home television.
However, even the games were subjected to post-war rationing. Military barracks served as the Olympic village and many teams had to bring their own food supplies.
Today, sixty years later, China is pouring about £20bn into its games. So far, Barcelona 1992 (£8.1bn) and Athens 2004 (£8.0bn) have gone down in history as the most expensive games.
Last year, Minister for the Olympics Tessa Jowell estimated that the 2012 Olympics would cost £9.35bn, four times the original estimate announced in 2005.
MPs and the public then accused organisers of underestimating the foreseeable costs and inflating the figures to keep extra money as a safety net.
Changing context and contingencies
Jowell said constructing the 500-acre Olympic Park in East London and other regeneration and infrastructure projects would cost approximately £5.3bn, while the rest would go to a contingency fund.
The government’s contribution is set at £6bn, while £2.2bn will come from the National Lottery. London taxpayers will pay a total of £625 million.
Sponsors like British Airways have given £40m for the marketing rights; Lloyds TSB has pledged £80m and EDF Energies will put up £50m and Adidas £100m.
But many feel that dipping into the National Lottery’s funds will divert money from grassroots sport and community projects as well as the maintenance of cultural heritage.
"The government will penalise the clubs and small organisations that were supposed to benefit from the Olympics,” shadow Olympics minister Hugh Robertson said last January.
However, the government is passing the blame for rising costs on the unforeseen VAT bill and inflation, mounting prices of steel and the need for covering contingencies.
Key issue
About £1.2bn of the London 2012 budget has been ear marked for security, especially as terrorism remains a pressing issue.
The pipe bomb that killed one and injured 110 in Atlanta 1996 also remain on organisers’ minds, as well as the 7/7 bombings the day after London was given the Games.
Other issues like the environment and meeting deadlines as well as contingency planning are also to be tackled before the 2012 Olympics open on July 27, 2012.
