There is a "real risk" preparations for the London 2012 Olympics will be knocked off-course, according to a report by the National Audit Office.
The regulator warned that while the Olympics remain on-track there are "significant challenges" to security and transport.
Amyas Morse, head of the National Audit Office, said not everything was "rosy:" “The Government is confident that there is money available to meet known risks, but, in my view, the likelihood that the Games can still be funded within the existing £9.3 billion public sector funding package is so finely balanced that there is a real risk more money will be needed.
"Moreover, important issues relating to the cost and staffing of venue security and restrictions on transport in London are still unresolved. The experience of spectators, visitors and Londoners in general would be diminished and the reputation of the Games put at risk if these issues were not sorted out.”
The regulator also points out there is "little scope for further unforeseen costs" to arise in the eight months before the Olympics.
The NAO warns that the cost of venue security has risen by £271m over the last year - and the estimated number of security guards needed has doubled.
And they say the impact of the Olympics on London's transport - including tubes, buses and over-ground rail is still unclear.
Public accounts committee chair Margaret Hodge MP warned that transport plans were "behind schedule" with a consultation on traffic issues delayed.
"This leaves planning until the very last moment and cannot be delayed further if transport chaos is to be avoided."
Hodge also warned the Olympic budget could need to be boosted by the taxpayer, adding: "For a project of this size with unknown risks and eight months remaining that is a tiny amount of money. LOGOC is likely to use all of its contingency funding and would also have to call on further Government support if there are further cost increases."
Yesterday sports minister Hugh Robertson defended allocating an extra £271m on security for the Olympics, saying the move was to inspire "confidence".