Soccer: The British minister for sports Hugh Robertson has confirmed the Olympic Stadium deal with West Ham and Newham Council has collapsed. Legal challenges by Tottenham and Leyton Orient, plus an anonymous complaint to the European Commission, have led to fears that court action could drag on for years while the stadium remains empty.

The stadium will now remain in public ownership and leased out to an anchor tenant following a new tender process by the Olympic Park Legacy Company (OPLC).

West Ham vice-chairman Karren Brady has already confirmed the club will bid again to become tenants at the stadium.

Robertson said: "The key point is the action we have taken today is about removing the uncertainty. The process had become bogged down in legal paralysis.

"Particularly relevant has been the anonymous complaint to the EC over 'state aid' and the OPLC received a letter from Newham Council yesterday saying because of the uncertainty they no longer wanted to proceed. That was the straw that broke the camel's back and we thought it better to stop it dead in it tracks now.

"We know there is huge interest in the stadium out there from private operators and football clubs and crucially we remove any uncertainty.''

Some £35 million (€40m) already earmarked under the Olympic budget will be used to transform the stadium after the Games. Prospective tenants will then be asked to bid for the stadium with the running track remaining in place.

Robertson added: "This is not a white elephant stadium where no one wants it, we have had two big clubs (West Ham and Tottenham) fighting tooth and nail to get it. The new process will be more like how Manchester City took over the Commonwealth Games stadium which is regarded as a leading example of how to do it.''

The tenants will pay an annual rent to the OPLC which should actually prove to be less costly for the likes of West Ham.

The move will also remove uncertainty over the stadium ahead of London's bid to stage the 2017 World Athletics Championships, although that was not a major consideration in the decision to abandon the current deal.

The Government, the London Mayor's office and the OPLC have moved to scrap the current deal as there were fears the legal challenges could take years to reach a conclusion.

It is understood that no contract has been signed with West Ham, allowing the move to a fresh tender process, but the club will be encouraged to bid again.

A joint statement by Brady and Kim Bromley-Derry, Newham chief executive, said they welcomed the move.

The statement said: "Uncertainty caused by the anonymous complaint to the European Commission and ongoing legal challenges have put the Olympic legacy at risk and certainly a stadium, as we envisioned it, may not be in place by 2014 due as a direct result of the legal delay.

"Therefore 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 will aim to help deliver the legacy.''

Uk Athletics chairman Ed Warner welcomed the move.

"It's fantastic for UK Athletics and it is a bold and decisive move by the legacy company,'' Warner told BBC Radio 5 Live. He also predicted that the decision would help London's bid for the 2017 event.

"We had a meeting with the IAAF inspectors last week and we gave Government guarantees that the athletics track will stay in place. The move you see today is simply confirmation of what we told the IAAF. The IAAF were concerned when they arrived but when they left they told us that the issue was completely resolved. We laid out the legal options and they went away happy.

"I'm very hopeful that we will get the nod for 2017."