G4S has revealed tonight that it stands to lose up to £50 million ($78 million/€64 million) after 3,500 military personnel had to be drafted into provide security for London 2012 because the company failed to meet its contractual obligations.
The Crawley-based firm said that it accepted the additional cost of the extra military personnel, and would see a loss on the contract of between £35 million and £50 million ($55 million/€45 million and $78 million/€64 million).
Home Secretary Theresa May was this week forced to ask the Ministry of Defence to provide more troops after the contractor admitted it did not have enough staff.
The company has a £284 million ($442 million/€361 million) contract with London 2012 to provide 10,400 security guards for the Olympic Games, but only 4,000 guards are trained and ready.
"We are deeply disappointed that we have not been able to fully deliver against our contract with the London Organising Committee of the Olympic and Paralympic Games (LOCOG) and that it has been necessary to call upon the additional military personnel," said Nick Buckles (pictured), the chief executive of G4S.
"The company is entering the final stages of an extremely complex workforce supply contract which is on an unprecedented scale.
"We have recently encountered significant difficulties in processing applicants in sufficient numbers through the necessary training, vetting and accreditation procedures.
"As a result, we will be unable to deliver all of the necessary workforce numbers.
"We have worked very closely with LOCOG throughout the build up.
"At the point we felt that we could no longer assure the scale of the security workforce we had committed to, we advised them of the situation.
"In partnership with the military and LOCOG, we are working flat out around the clock to resolve the situation.
"We are determined that together we will deliver a successful and secure Games."
Shares in the company were down 1.5 per cent when markets closed today, meaning more than £150 million ($234 million/€191 million) has been wiped from its market value over the past two days.
G4S is the world's largest security company and employs more than 667,000 people in 125 countries.
But there is no sympathy for the situation the company finds itself in, especially as some of the military called into have had to cancel leave despite having only recently returned from active duty in Afghanistan.
"We do not underestimate the impact on the military personnel and their families and express our appreciation to them," said Buckles.
"G4S accepts its responsibility for the additional cost of the increased military deployment resulting from the shortfall in workforce delivery."
By Duncan Mackay at the Main Press Centre on the Olympic Park in London