G4S settled a months-long dispute with the organisers of the London Olympics, having failed to supply enough security guards for the 2012 Games, and said yesterday it will take a 70 million pound loss on the contract.

The world’s No.1 security firm said just weeks before the Games began that it could not provide all 10,400 guards needed for the event, forcing the government to call on military and police personnel to cover the shortfall.

G4S, which had to explain its failure to parliament and saw two directors resign after an internal report into the affair, had estimated the loss on the contract, worth about £240 million, to be about £50 million.

The firm, which has incurred penalties and paid for the emergency staff that were drafted in, said the difference was largely due to it waiving a larger chunk of its management fee.

“The UK Government is an important customer for the group and we felt that it was in all of our interests to bring this matter to a close in an equitable and professional manner without the need for lengthy legal proceedings,” G4S Chief Executive Nick Buckles said yesterday, after months of wrangling with Games organisers LOCOG.

The group said it had also incurred additional costs of £18 million relating to charitable donations, external fees, Games sponsorship and marketing.

G4S had already provided for a £50 million charge at the half year and said all the costs would be taken in the 2012 accounts as an exceptional charge.