From BBC News:
http://news.bbc.co.uk/1/hi/england/london/6452865.stm

Interesting bit:
BBC London's political editor Tim Donovan said Mr Livingstone may raid
Transport for London reserves and use a £200m loan he has taken out
for transport improvements in east London to help find the £300m.

So it looks like there could be cuts in transport for the Olympics.
What do you think will be cut?
IMHO one of the DLR projects (replacement of the North London Line or
3 cars upgrade). Or may be even some other TfL project outside East
London :-S