The funding package of pre-allocated cash is being handed to the Mayor of London’s office as he prepares to take control in April of the capital’s affordable housing programmes.

The funding supports the Mayor’s four-year commitment to build 55,000 affordable homes by March 2015, and to bring 45,000 existing social homes up to standard across London, as well as supporting plans for the Olympic Park.

The current Olympic land and debt deal, first agreed in March 2010, will also be replaced by new receipt sharing arrangements for the Olympic Park to reflect the devolution of Olympic legacy to the Mayor and to protect the interests of the taxpayer.

Local Government Secretary, Eric Pickles said: “This settlement hands real power to London allowing Londoners to manage their own affairs.

“It goes hand in hand with the new localism powers and spending freedoms we are handing councils around the country so they can be as efficient and effective as possible with public funds.

“The lasting legacy from the Olympics will showcase the regeneration and house building achievements that ensures London remains a truly great city.”

Mayor of London, Boris Johnson said: “This is a landmark agreement that sees responsibility and accountability for housing and regeneration resting squarely with London.

“We are now in a great position to drive forward vital investment that will deliver more affordable homes across the city, secure a lasting legacy in the Olympic Park and create thousands of new jobs.

“I will do all I can to grasp the fantastic opportunities this settlement provides and ensure that London becomes an even better place to live, work and invest in.”