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McCann Erickson, a unit of U.S. Interpublic Group, has beaten British advertising group WPP to promote the 2012 London Olympics, a source close to the process said on Wednesday.

Confirming a report in the Financial Times, the source said McCann Erickson was on the point of signing a deal after bidding significantly more than WPP for the right to market the Games, the first time firms have been invited to pay for the privilege.

The FT said McCann Erickson had offered about 10 million pounds' ($15 million) worth of marketing services in return for becoming a tier-three sponsor, meaning it will be named as the official provider of advertising to the Games.

A McCann Erickson spokesman said: "We're hugely keen and enthusiastic to work on it but nothing has been confirmed. We're hoping we will hear this week."

WPP, whose agencies include JWT and Ogilvy & Mather, declined to comment. The London Organising Committee of the Olympic Games was not immediately reachable.

The British government has been criticised for spending 9.3 billion pounds on the Olympics in the middle of a recession, and is already dipping deeply into a 2.7 billion-pound contingency fund as private funding dries up.

The costs of the Olympic Stadium have doubled since London's bid was announced and the government recently bailed out the Olympic Village project with a 95 million pound cash injection.

The Olympics marketing contract is a high-profile and prestigious one, but some agencies are concerned it is not worth the cost, especially as they struggle with a slump in global advertising spending.

WPP and Interpublic both reported depressed quarterly results on Tuesday. WPP cut its full-year forecasts and Interpublic reported a loss.

WPP shares were up 1.9 percent at 432.5 pence at 0858 GMT, outperforming the European media index, which rose 1.1 percent. WPP had closed down 3.9 percent on Tuesday.

(Source: Reuters)