The financial crisis has threatened to undermine the position of Diack, who must stand for re-election next year if he wants to extend his 11-year reign as the IAAF's President, and has led to growing support for London 2012 chairman Sebastian Coe or world pole vault record holder Sergey Bubka to take over.

But Diack claimed today at a meeting of the IAAF's ruling Council in Kyiv, attended by both Coe and Bubka, who are the vice-presidents of the organisation, that the financial situation has now stabilised.

He said: "Following our last Council meeting, in Doha in March, the IAAF management took a hard look at the IAAF’s financial status in a time of economic uncertainty, with the aim to ensure that we could cut costs but also consider new revenue sources.

"I am delighted that the Council accepted that a great effort had been made, led by the treasurer Jean Poczubut and supported by each IAAF department, to reduce costs significantly.
 
"The important point is that we have done this without damaging the IAAF’s core business or fundamental projects which count as an investment in our future."

The IAAF's financial situation has been eased by a new deal with Samsung to sponsor the Diamond League, the sport's flagship series of global meetings that launched earlier this year.

The two-year deal is currently worth only $2 million (£1.2 million) per year in cash but is potentially worth more than $10 million (£6.2 million) if Samsung take up the year's option in the contract and extend their support until 2012, Diack claimed.

He said: "I am also glad to announce that the IAAF was able to bring in a new title sponsor for the IAAF Diamond League, starting already in 2010, which adds millions to our annual income.

"Without going into specific details, I want to underline the fact that the IAAF will have a better balance of income and expenditure and never less than $50 million (£31 million) in capital reserves, until 2015 at least.

"I am also happy that the improved strength of the dollar compared to the euro has also helped us to save money on our administration costs.

"We have not needed to cut the prize money offered at IAAF and we will first look to reduce staff costs by a reassessment of roles and careful restructuring, rather than layoffs."

At last year's World Championships in Berlin the IAAF paid athletes $7.3 million (£4.5 million) in prize money, with each gold medallist winning $60,000 (£37,600).

They also rewarded anyone who set a world record a $100,000 (£62,660) bonus.

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