Under grey mid-winter skies, an ambitious and much-criticised experiment in urban renewal is coming to fruition.

Rising out of derelict land crisscrossed by old canals in the heart of London's East End, the centrepiece of the 2012 Olympics is now only a few months from completion.

It is part of a £9.3 billion ($18.5 billion) bet that a two-week sporting event will bring Britain prestige and profits for years to come and restore national confidence in a deep slump.

In the coming weeks, gardeners will start to lay turf and plant 4000 trees and 300,000 wetland plants among the 200ha Olympic Park, where an 80,000-seater stadium, velodrome, aquatics centre and basketball arena have been built on the site of old warehouses.

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Workers are finishing off a forest of small-rise apartment blocks for Olympic Village, providing accommodation for 17,000 athletes and officials, which will become 2800 homes and a campus for 1800 students after the Games.

Next door is Stratford's rejuvenated transport hub, which will be served by high-speed trains during the July 27-August 12 extravaganza, and Europe's largest urban shopping centre, a behemoth of 300 shops, 70 restaurants, three hotels, a bowling alley and Britain's biggest casino.

Across London, a host of other locations are being fitted out for the Olympics and the Paralympics that will follow. They include Horseguards Parade, which has been designated for beach volleyball; The Mall and Hampton Court Palace, which will be used for cycling; Wembley Stadium, for football; and Lord's cricket ground, for archery.

Three zones - Victoria Park in Stratford, Hyde Park and Trafalgar Square - will be "festival sites", for fun on a mass scale. A "Cultural Olympiad", featuring 500 events in the arts, with a budget of £40 million, is already under way.

At last, the global party that Britain promised six years ago is on the horizon.

With the New Year, the British Government and the London 2012 Organising Committee (LOCOG) are beating the drum louder than ever. They hope to dispel criticism of the cost and the hype, the Olympian strains that will be imposed on the capital's already creaking transport system and the ever-present dread of a terror attack.

"This will be the year Britain sees the world and the world sees Britain. It must be the year we go for it," Prime Minister David Cameron said as he linked the Games with celebrations of the Queen's 60 years on the throne.

"It gives us an extraordinary incentive to look outward, look onwards and to look our best: to feel pride in who we are and what - even in these trying times - we can achieve."

A New Year's Day parade in London with 8000 performers pressed home the Olympics message and the long-running TV soap East Enders paid tribute to the "Olympic Village" of Stratford in a change to its opening title sequence.

Britain won the bid for the 30th Olympic Games in 2005, in the middle of one of the most lavish decades in history. Today, though, unemployment has leapt and government spending is being slashed. Every penny that has been earmarked for the Olympics is now under the microscope.

The Government has just agreed to more than double the budget for the opening and closing ceremonies to £81 million, triggering criticism from world-record marathon runner Paula Radcliffe and others that the money should go to grassroots sport.

The Guardian noted dourly that Britain was able to do with far less back in 1948, when London staged the Olympics in post-World War II austerity.

For the opening ceremony, Big Ben struck four times, King George VI declared the Games open and 2500 pigeons were released. This year, Oscar-winning Slumdog Millionaire film-maker Danny Boyle is mustering a cast of thousands, with Sir Paul McCartney rumoured to be among the stars.

Cameron is making a virtue out of the spending, saying the Games will provide an excellent shop window for Britain.

"We decided to go in at the higher figure for the benefit of the country," said Sports Minister Hugh Robertson, who claimed four billion people would be watching the opening and closing ceremonies. "We hope it's an impression that people will say 'we want to come back here, do business and spend tourism money'."

It is not hard to find those who say they are sickened by hype. The two Games mascots, Wenlock and Mandeville, have been described as resembling gay leeches, while the Games logo, which officially has an "edgy" geometric design, is said to look like Lisa Simpson performing fellatio.

But a deeper concern lies over a terrorist outrage, of the kind that hit London on July 7, 2005, when suicide bombers killed 52 people and injured more than 700 in attacks on the transport system.

Seeking to allay these fears, the Government has nearly doubled the security budget to £553 million and boosted the number of troops from 7000 to 13,500 - more than in Afghanistan right now.

The navy's biggest ship, the helicopter carrier HMS Ocean, will be stationed at Greenwich, and an amphibious assault ship, HMS Bulwark, will be deployed on the South Coast in Weymouth Bay, near the Olympic sailing events.

Typhoon jets used over Libya will be stationed in west London.

There is also a more discreet concern hidden in this announcement.

The extra money will also set up a 1000-strong "unarmed contingency force for deployment in the event of an Olympics-related civil emergency" - an apparent reference to the possibility of an "Occupy the Games" protest.