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The lack of a finalised budget for the London 2012 Olympic Games has left the government "financially exposed", a group of MPs have said.

The public accounts committee's (PAC) report on risk management for the Games' preparation says the fixed deadline for the project and its already fluid budgets increase the danger that the cost will go up still further.

It notes that the Department for Culture, Media and Sport's (DCMS) original budgeting was below the recently revised current estimate of £9 billion and says the government failed to identity the extent of private sector interest in funding the Games.

"If the delivery timetable slips, then the danger increases of delivery organisations having to pay more to contractors or reduce standards to ensure that the Games open on July 27th 2012," committee chairman Sir Edward Leigh said.

"This risk must be addressed by establishing suitable incentive arrangements with contractors to deliver quickly, to cost and to the right quality."

A further danger identified by the report is the potential for confusion created by the existence of two bodies charged with overseeing the Games – the government Olympic executive and the Olympic board itself.

Conservative shadow Olympics minister Hugh Robertson said: "The issues surrounding the coordination of the Olympics project highlight that the government's new reporting lines, with the Olympic executive in one department and the Olympics minister in another, are a total shambles.

"London 2012 needs simple and accountable government support structures to ensure successful delivery and these are not in place."

The DCMS did not comment on the report prior to its publication.