LONDON’S bid for the 2012 Olympics faces a hiccup today when 180 East London businesses are expected to withdraw their support.

The businesses — which include a 100-year-old salmon smokery and one of the last vinyl record pressing plants in the country — have given the London Development Agency (LDA) a deadline of today by which to offer sufficient compensation if they are forced to move to make way for the Olympic site.

If they are not satisfied, they will write to the International Olympic Committee asking them to decide against London.

Lance Forman, managing director of H Forman & Son, a smoked salmon producer, said: “We are a 100-year-old firm that could be put out of business for the sake of two weeks of sport.”

The companies based in Marshgate Lane, Newham, are dissatisfied with the LDA’s response to their demand for compensation or alternative land should they be forced to move.

Mark Stephens from Finers Stephens Innocent, a law firm, representing the businesses affected by the bid said: “If agreement isn’t reached all the businesses will go bust.

“This could be 15,000 workers on the dole, which would be three times worse than Rover.”

Mr Stephens said “We are in the last chance saloon with the police hammering on the door. These deals should have been agreed in November,” Mr Stephens said.

The lawyer accused Tessa Jowell, the Culture Secretary, of being “weak and ineffectual” and doing nothing to help to resolve the situation in contrast to Tony Blair’s quick response to Rover’s troubles.

A spokesman for the LDA said only 5,000 workers would be potentially affected by the redevelopment of the site and that the Olympic Park alone would generate over 11,000 jobs.

He said that the LDA had been working for months to facilitate the agreement of relocation packages with the businesses and a range of potential sites in the area had already been identified, including parts of Beckton, Dagenham, Leyton and the Royal Docks.

He said: “The LDA is now in detailed discussions with the majority of businesses in the area and have ensured that this includes the large employers.”

The body, set up by Ken Livingstone, Mayor of London, said it was “confident” that its offers to businesses represented the market value of their properties, something that it is required by statute to provide, and that businesses could take the valuation to indepedent arbitration if they were not satisfied.

However the LDA has finalised deals with just seven of the 300 companies on the site as to how they will be compensated. Another 12 deals have been agreed in principle.

The LDA claims that a further 100 companies have said they do not want to negotiate until they know if London has indeed won the bid for the 2012 Olympics.

Mr Stephens said: “Negotations with the LDA are going slower than snail’s pace — more like snails in reverse.”

Because so few deals have been agreed, businesses could be faced with compulsory purchase orders if the London bid is given the go-ahead.

The LDA said it had “all the funding in place to fulfill its obligations in relation to London’s Olympic bid.”

It added that the LDA had gone beyond its legal obligations to assist businesses at this stage in the process, by for example funding the legal and surveyors’ costs for businesses.

The International Olympic Committee is due to decide on the host city on July 6. Paris, New York, Madrid and Moscow are the other contenders.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax