He will ask President Dilma Rousseff and Finance Minister Guido Mantega to authorise the debt issue at a meeting next month.

States and cities in Brazil must get Federal approval for bond issues from the Ministry of Finance and the Central Bank.

Brazil shut down municipal bond issuance nearly 20 years ago to prevent cities from becoming overly indebted.

If Rio's plan is given the go-ahead, proceeds from the city's bond sale will be used to build infrastructure and sports facilities for the Olympics and Paralympics, Paes said.

Brazil's readiness to host high-profile sporting events such as the 2014 World Cup and 2016 Olympics has been questioned by critics who point to the country's outdated infrastructure, high crime rates and widespread poverty.

"There is so much money [we have to raise]," said Paes.

Rio has set its budget at $2.82 billion (£1.77 billion), with another $11.1 billion (£6.9 billion) earmarked for infrastructure costs, including transport upgrades.

There are eight existing venues that need to be renovated in time for the Games, including the João Havelange Stadium where the track and field events will take place.



The velodrome for track cycling, the aquatics centre for diving and water polo and the João Havelange Stadium all need extensive work.

The existing sites for archery, sailing, rowing, equestrian, shooting, kayak and rowing require upgrading.

Up to $200 million (£126 million) has been set aside for improving them.

Meanwhile, another 11 permanent venues costing an estimated $674 million (£423 million) are to be constructed for basketball, judo, taekwondo, wrestling, handball, modern pentathlon, fencing, tennis, swimming and synchronised swimming, canoe and kayak slaloms, and BMX cycling.

Then, at least $78 million (£49 million) will be spent on seven temporary structures for beach volleyball, triathlon, marathon swimming, race walking, road cycling, weightlifting, hockey, mountain biking and modern pentathlon.

Rio has also promised to spend $427 million (£268 million) on an Athletes' Village.

Costs will inevitably raise.

The budget for the 2007 Pan American Games held in Rio was $177 million (£111 million) but it is estimated that the final cost was $2 billion (£1.2 billion).

Another source of funding that Paes hopes to tap into is the Cepac (Certificate of Potential Additional Construction), a real estate title that can be sold at public auctions.

Paes has estimated that an area around the city's port - where many of the venues are scheduled to be built - is now worth $3.5 billion (£2.1 billion) and he plans to sell off some of that land to private investors.

The decision was made after the conclusion of the new Economic Feasibility Study for Rio's port area in November last year.

It is anticipated that the first auction of credits to will be held next month.

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