AN investigation has been launched into "irregularities" at the London Development Agency (LDA) after a gap of up to £100million was reportedly found in its Olympic accounts.

A team of forensic accountants from KPMG was called in to locate the source of the alleged discrepancy, which was discovered during a routine audit.

Two senior members of staff at the LDA are reported to have been suspended, but there is no evidence of wrongdoing.

Gareth Blacker, who was in charge of buying the the Olympic park land, forcing nearly 200 businesses off the site, is also reported to be on indefinite leave along with his accountant.

KPMG focused their investigation on the Olympic Legacy Directorate, which is Mr Blacker's department.

The LDA allegedly failed to set aside between £60 million and £100 million in compensation for the businesses forced out of the Olympic site.

A total of 193 small and medium-sized businesses had to move to alternative premises but the LDA has not yet settled 72 claims for compensation, four years later.

The gap in the accounts relates to a reported failure to put aside the money and KPMG will decide whether this was an oversight or a cover-up possibly amounting to careless use of public money.

Mayor of London Boris Johnson ordered a financial audit across the LDA in March and the Olympic Legacy Directorate was the last to be reviewed.

As of October, it will pass its £1.1 billion budget to a special Olympic legacy company, operating at arm’s length from the LDA.

The discrepancy of as much as £100million could cause other infrastructure projects to be put back or shelved as it creates a cashflow problem for the LDA.

An agency spokesman confirmed a review highlighted some “additional spending commitments” but said shortfall could be made up from savings elsewhere and additional borrowing would not be needed.

“We have identified ways of absorbing this without affecting core programmes,” he said.

The spokesman added KPMG is not carrying out a fraud investigation.

He said: "Since the new mayor has come in, we have been reviewing governance and procedures across the agency.

"As the last part of that review, and in preparation for the transition to the new Olympic legacy company, we have identified additional spending commitments within the Olympic Legacy Directorate that have exceeded our estimated figures.

"Because of the work we have already done to achieve greater value for money, we have been able to adjust our budgets and accommodate these commitments with minimal impact on our plans for London.”