The Daily Telegraph can disclose that Newham, which will host the games, has had the biggest surge in new National Insurance numbers than any other part of Britain since the 2012 decision was made in 2005.
The 51,000 surge in migrant workers into Newham, where the Stratford Olympic stadium and village is situated, is the equivalent of a town the size of Keighley, the Yorkshire town, being added to the impoverished London borough. Most of the foreign workers have come from Eastern Europe and the Baltic states.
Last year there were 20,500 new registrations in Newham compared to 13,000 for Birmingham, Britain's Second City, and 11 million for Manchester.
The revelation has sparked fears that any jobs boom generated by the £9.4 billion Olympics budget will not benefit the local workforce in a borough which is one of the most deprived in the country. In a week in which unemployment surged to 1.8 million there are now 12,000 unemployed in Newham, or 10.7 per cent, the second highest in London.
The revelation that 50,000 migrant workers have poured into Newham in the last three years came after Tessa Jowell the Olympics minister, said Britain would not have bid for the games if the government had known that there was a recession approaching.
Labour MP Frank Field, said: "This is the biggest public expenditure programme in the history of the country yet the benefits appear to be going abroad. The extraordinary number of national insurance registrations in Newham suggest it is not providing much additional employment for British people. This is not what we were told when we secured the Olympic games."
Mr Field suggested, however, that the deepening recession might bring a silver lining to London 2012. "It must now be perfectly reasonable for the government to strike a much harder bargain on contracts to reduce the cost," he said.
"It should not be £9.4 billion; it should come in much lower as we know there are hardly any orders being placed in the construction world. We should also try to ensure at the same time that the additional jobs go to British workers."
Sir Robin Wales, the Mayor of Newham, said that the statistics on foreign workers were deeply depressing. "I am absolutely determined to ensure that the residents of Newham benefit from the 2012 Games.
"As the employment market becomes ever more competitive, no one in Newham or anywhere in Britain can assume they will be first in line for jobs and opportunities. We have to show that we have the skills and the energy to rise to grasp the opportunities that the Games will bring.
"There are many reasons why some people do not work, and I believe it is rarely because they are idle. But it may be that the benefits system will leave them worse off if they take a job; it may be that they lack the necessary skills; it can simply be a matter of psychology some individuals lack confidence and drive because they have little or no experience of work. Unless we face those realities we can never help people to realise their full potential."
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