Britain insisted on Monday it had not abandoned plans to bid to host the 2012 Olympic Games, but the signals from government are far from positive.
There was a case for bringing the Games to London but the government was wary of cost overruns in recent Olympics and wanted to ensure it would help regenerate run-down parts of the capital, Culture, Media and Sport Secretary Tessa Jowell said.
The International Olympic Committee will choose the venue for the 2012 Olympics in 2005. New York, Moscow, a German city, and a Spanish city -- probably Madrid -- are almost certain to bid. Paris is also expected to make a pitch.
Jowell and Sports Minister Richard Caborn will present their proposal to Prime Minister Tony Blair's Cabinet by the end of January, when a decision will be taken.
A report undertaken on behalf of the government, London Mayor Ken Livingstone and national Olympic officials, last month urged the city to bid for the Games. It said the cost of the bid would be 13 million pounds.
"But that would be the tip of an iceberg. I am right to be cautious," Jowell said. "We estimate that around two billion pounds ($3.2 billion) of public subsidy would be required... if we were to win."
The government would only go ahead if it could nail down the costs, she said. "We are not going to find... a dead anchor around the neck of government because we failed at the outset to make a proper estimate of costs. We will go into this, if we do, and we will decide at the end of January with our eyes wide open and understanding exactly what the cost to the public purse will be," Jowell added.
Ministers have privately shelved the idea of bidding, The Observer newspaper reported on Sunday.