While the sporting benefits to Britain are clear, much of yesterday's elation stemmed from hopes that the Games will also bring an economic boom to London and the UK.

The main effect of staging the Games in 2012 will be the complete transformation of London's Lower Lea Valley, billed as the largest remaining regeneration opportunity in inner London, running north to south from Stratford to Canary Wharf on the banks of the Thames. The area is home to one of the most deprived communities in the UK, with high unemployment and a poor public-health record.

Planning permission has already been obtained to build key Olympic venues there, including an 80,000-seat stadium, a world-class aquatic centre, a velodrome and BMX track and a three-arena sports complex. There will also be an Olympic village to accommodate up to 17,800 athletes and officials.

Those properties will be used for public housing once the Games are over.

The effort of bringing the plans to life will affect every sector of the London and UK economy.

It is projected that 12,000 permanent jobs will be created in the area of the Olympic park alone, as well as thousands of temporary ones.

It is thought 7,000 jobs, at the very least, will be created in the construction sector.

Thousands of firms involved in manufacturing, catering, merchandising and services should also be able to cash in.

The Olympics have already accelerated projects such as the £1.25-billion East London railway line and the extension of the Docklands Light Railway. It has also given added impetus to projects such as the Channel tunnel rail link - which will serve the Olympics with a high-speed "javelin" service.

The Games should also provide a boost for the tourism industry as over half a million visitors head to the UK. Analysts believe Olympics-generated income from tourism that year could reach £2 billion.

There are already 100,000 hotel rooms in the capital, more than is necessary, with another 17,000 expected to be built over the next seven years.

But the key issue is not so much the number of visitors who attend the Games, but the effect on the tourist industry afterwards.

Sydney says its economy was boosted by £5 billion in the five years after the city hosted the Games in 2000.

House prices in London could rocket by 66 per cent as a result of the city winning the 2012 bid.

In the five years running up to the Games, previous host cities Barcelona, Atlanta, Sydney and Athens saw average house price growth of 66 per cent, according to the building society Halifax.

During the same period, countries hosting the Games saw a 47-per-cent rise in the cost of property, meaning price growth in the city hosting the Games outperformed the national average by 18 per cent.

Barcelona saw the biggest house-price boom in the run-up to the Olympics, with prices in the city soaring by 131 per cent in the five years before the Games, 49 per cent more than the average for Spain during the same period.

Halifax said the regeneration effects of hosting the Games had a positive impact on house prices, with upgraded transport links, as well as better cultural and leisure facilities all pushing up the cost of property.