An official report has praised London's efforts to host the 2012 Olympics as 'high quality' but Paris still appears to be the favourite to stage the Games.

Releasing its findings from inspections of the five candidate cities earlier this year, the International Olympic Committee (IOC) gave the UK Capital favourable comments for several key elements of its bid.

It said London's plans were of 'high quality and indicated a high level of planning by the key organisations involved in the preparation of the bid.'

The report noted the Capital's 'detailed and meticulous' budgeting for event was 'reasonable and achievable', while a London Games would be a catalyst for the regeneration of the deprived Lea Valley area, the proposed site of the Olympic Park.

London's current public transport system has been much criticised but the IOC said planned investment mean the Games would pass off without transport problems.

It noted that 95% of competitors in London would have a journey of only 15 minutes or less from the village to their venues.

"Provided [the] proposed programme of public transport improvements is fully delivered on schedule before 2012…the Commission believes that London would be capable of coping with Games-time traffic and that Olympic and Paralympic transport requirements would be met," the report said.

However, although the Committee did not rank or grade the cities, some areas of Paris' almost flawless report suggest the French capital is ahead of London and will be victorious.

The IOC praised Paris for the public support it had generated. Research commissioned by the organisation shows 68% of Londoners support the bid compared to 85% of Parisiens.

Public support is likely to be a key factor when the IOC meets on July 6 to decide who will actually host the Games.

Paris was also praised for the ecological elements of its bid which the IOC said 'would result in significant gains and legacies from the Games', while the city received the only use of the word 'excellent', used to describe its accommodation plans.

Dan Bridgett, chief executive of the London Chamber of Commerce, said the Capital appears to have made progress on catching up with Paris.

"London was clearly not in pole position when the race began. But after today's report it is fair to say that we have gained ground on Paris and have the momentum to clinch the Games next month," he said.

"With business and consumer confidence on the floor, it is difficult to over-estimate how vital winning the 2012 Games now is to our economy."

London and Paris are up against New York, Moscow and Madrid to host the event.