Lord Coe has reassured the Olympics governing body that the credit crunch will not impact on London's plans for the 2012 Games.

London faces a major challenge in staying within its £9.3 billion budget largely because of the problems in raising the anticipated level of private finance for the £1billion Olympic village and £400 million media centre.

International Olympic Committee (IOC) president Jacques Rogge has warned that the Olympic movement must embrace an era of austerity if it is to maintain its position as the pre-eminent global sporting event.

After the lavish spectacle of this year's Beijing Games, Rogge said he wanted to try to hold down the size and cost of future Games to ensure they remain affordable.

But Coe told a meeting of European Olympic committees in Istanbul that organisers would "honour commitments" to the IOC.

"We are now in a very different economic and financial environment from when we bid for the Games,'' he said. "The world is a very different place than even six months ago. We want to reassure you: we are no less determined to honour the commitments we made to you.

"Even in the current climate and with the complexities of bringing the private sector to the table, there has been no lack of progress."

© Independent Television News Limited 2009. All rights reserved.