( CNN ) -- A deal which would have seen English football club West Ham United move into the London 2012 Olympic Stadium collapsed on Tuesday , casting doubt over the future of the purpose-built venue . The British government announced the stadium , which is located in the Stratford area of east London and has the capacity to hold 80,000 spectators , will be kept in public ownership and rented out to a suitable tenant . `` The government and mayor of London have decided to end the current process to dispose of the Olympic stadium , '' read a statement on the Department for Culture , Media and Sport 's website . `` The stadium will now be retained it ( sic ) as a public asset , and the Olympic Park Legacy Company ( OPLC ) has been asked to start a new process to secure tenants for the stadium . '' The latest development also secures the future of the stadium as an athletics venue , with London bidding to host the 2017 World Athletics Championships . West Ham originally won the right to move into the stadium in February , beating off competition from rival London club Tottenham Hotspur , after their bid received the unanimous backing of the OPLC . But the decision has now been reversed amid concerns that a continued legal challenge from Tottenham could cause delays which would impact negatively on the future of the stadium . Another contributing factor is the time London would need to prepare for hosting the 2017 athletics showpiece , with Qatar also bidding to stage the championships in Doha . `` The government is committed to securing a legacy from the Olympic stadium , and wants to see it re-opening in 2014 , '' British sports minister Hugh Robertson said . `` The process to sell the stadium has become bogged down . `` We are acting today to end the legal paralysis that has put that legacy at risk . Ending the current sale process and looking for a leasehold solution will remove the current uncertainty and allows us to help secure the future use of the stadium with more confidence . '' Despite the setback , a statement from West Ham vice -chairman Karen Brady insisted the news was positive and the club would be interested in pursuing tenancy of the site . `` We would welcome a move by OPLC and government to end that uncertainty and allow a football and athletics stadium to be in place by 2014 under a new process . `` If the speculation is true , West Ham will look to become a tenant of the stadium while Newham Council will aim to help deliver the legacy . The stadium will be the center of global attention when London becomes the first city to host the Games for a third time next year , with the opening ceremony kicking off proceedings on July 27 , 2012 .
West Ham United 's move to the London 2012 Olympic Stadium has collapsed . The stadium will now be retained as a public asset and rented to a tenant . Score: 7 Tottenham 's continued legal challenge cited as reason for proposed new arrangements .