The Civic Federation, a Chicago-based, independent, non-partisan agency, which was monitored the city's administration for more than a century, backed the $4.8 billion (£2.9 billion) plan.

Laurance Msall, the group's President, said: "The operating budget of the Chicago 2016 Olympics provides adequate protection for taxpayers."

But their report also warned that if Chicago is awarded the Games ahead of its rivals Madrid, Rio de Janeiro and Tokyo by the International Olympic Committee at its Session in Copenhagen on October 2 an independent, non-political organising committee must be established.

It also called for the City Council to maintain an independent oversight role.

Finally, it called on the city to follow its plan to make these the most heavily insured Games in history, especially given the uncertainty of the real-estate market with what would become the Olympic Village.

Msall said: "Real-estate risk can be managed.

"[But] all the risk cannot be eliminated."

Chicago's plan calls for the Olympic Village to be based on the former site of Michael Reese Hospital on the near South Side.

The report pointed to the recent decline in the real-estate market that caused problems for Vancouver's upcoming Winter Games next year.

Unlike its rivals, Chicago's bid does not have any financial guarantees from the national Government.

But with "capital-return insurance" and other deals, Msall said, the Olympics would most likely not have to draw on the city and state contingency funds being set aside as guarantees the Games would be fully financed no matter what.

He said: "There is an enormous amount of work for the City Council to perform.

"The city council has to exercise its oversight responsibility."

Msall said it was essential for the city to find an independent, capable, financially astute chief executive officer to lead the organising committee.

Chicago's City Council commissioned the Civic Federation to do an independent, objective review of the Chicago 2016 plan in June.

The 90-page report was delivered after six weeks at a cost of more than $100,000 (£62,000), much of it paid for by local foundations aligned with the Civic Federation.

It was performed largely by London-based L.E.K. Consulting, a firm that does have business with the city, but Msall said he felt confident that did not taint the findings.

He said: "We believe it was able to carry out a full and independent review."