Planning for London's Olympic Games in 2012 is on track and on budget, the head of the London Olympic Organising Committee (LOCOG) insisted on Thursday amid fresh concerns over funding.

Two senior Olympic executives have been suspended after an estimated "hole" of up to STG100 million ($A205.82 million) was discovered in the 2012 accounts of the London Development Agency.

Accountancy firm KPMG has launched an investigation into how the money - earmarked to compensate businesses forced to relocate to make way for the Olympic Park - apparently disappeared from the agency, the business and development arm of London Mayor Boris Johnson.

The funding hole has sparked fears that some Olympic projects could have to be delayed or dumped. But LOCOG chief executive Paul Deighton told reporters that everything remained on track for the Games.

"It's on schedule, a little bit ahead of schedule, and right on the budget that was committed back in 2006," Deighton told reporters.

Since London won the Games in Singapore in 2005, world financial markets collapsed and dented LOCOG's ability to attract private sector funding.

LOCOG has already drawn on about one third of a STG2.7 billion ($A5.56 billion) government contingency fund to finance the construction of the international media and broadcast centres as well as the athletes' village.

Deighton said LOCOG had managed to insulate itself from the credit crunch by having its budget for venues and infrastructure in place well before the credit crunch.

LOCOG had also attracted sponsors well in advance of the financial meltdown, allowing it to have raised about STG520 million ($A1.07 billion) of the STG700 million ($A1.44 billion) it needs before the Games open in July 2012.

"That doesn't make us complacent about the challenges ahead but it puts us on a firm foundation to keep this project in great shape," he said.

The International Olympic Committee's press commission chairman, Australian Kevan Gosper, said construction work at the Olympic site, on a former industrial wasteland in London's east, was progressing well.

Organisers hope that the massive development will help regenerate a previously rundown area of London and leave a lasting sporting legacy, with various sporting venues once the Games are over.

Construction is underway on many of the venues, including the 80,000-seat Olympic stadium, and is expected to be completed by 2011.

"These Games are coming back to a country which over time has invented almost the majority of sports that are on the Olympic program," Gosper said.

"This is the big story that London will bring.

"It's not only a city which bailed the IOC out in 1908 and particularly in 1948 so soon after World War II, but it's a country and a city which has brought sport into the Olympic movement."

Belinda Tasker
AAP