FIFA puts £400m aside in case of World cup collapse

Fifa has been forced to build a £400m contingency fund to cater for the possible collapse of the 2010 World Cup.

Insurers are holding off on a decision to provide coverage for the event in South Africa amid fears that the stadiums will not be ready in time.

According to a report in The Guardian assessors for Munich Re, the German insurance giant which insured the 2006 tournament in Germany, are concerned about progress.

"The situation is quite difficult and fluid,"a spokesman for Munich Re told The Guardian.

"The problem is they need 10 stadiums and some of these are rugby grounds that are run-down and in a very bad condition."

A Fifa insider admitted that insurance companies also had concerns about security, transport infrastructure and the local political climate. In a press release after its executive committee meeting last month the world governing body said: "Fifa is aiming at reserve capital of over $800m by the end of 2010."

Although Fifa is prepared to cover its commercial obligations for the 2010 tournament, which is the pet project of the president, Sepp Blatter, future bids - such as England's for 2018 - must provide evidence of adequate insurance support.