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Anticipated costs for the 2012 Olympic build and infrastructure have risen but the project remains on time and budget, a report has said.

Figures reveal that expected final costs have gone up by £5m, a report by the Olympic Delivery Authority said.

The increase was blamed on transport and infrastructure for the Olympic Village and Stratford City.

The government said it would not use the contingency fund and described the projected budget as stable.

Sport and Olympics Minister Hugh Robertson said: "My suspicion is that this will now become less a contingency for construction and more a contingency fund for the wider project."

Currently, there is £1.2bn of the contingency left with 65% of the venues and infrastructure for the London 2012 Games already completed.

Mr Robertson said the scope of the project "was changing in front of our eyes" and added that further challenges awaited.

He added: "The most damaging thing for the project would be to surrender contingency now and then have to go back to Treasury in 18 months and say 'we need some more money'."

ODA chief executive David Higgins said the organisation could make the £27m of savings called for by the Government as part of the £88m of cuts announced this week to the Department of Culture, Media and Sport.

ODA chair John Armitt said: "This report shows that the project continues to be on time and within budget.

"The ODA has worked hard to make considerable savings since the start of the project with £600 million saved to date to keep us on track."

Meanwhile former Olympics minister Tessa Jowell has revealed that the mayor of Sao Paulo has registered an interest in buying London's temporary basketball arena in time for the next Olympics in 2016.

She said: "London's basketball arena may have a second life in Sao Paulo."