The Baton, which bears a message from the Queen and is carried by runners around the Commonwealth, has been sullied by claims it has been used by a UK firm to cash in on the Royal brand, Buckingham Palace fear.

Commonwealth Games officials have been rocked by allegations that £250,000 ($399,000) was paid to British-based company AM Films, providing logistical services during the Queen's Baton Relay in London last October, without a formal contract being signed.

The fall-out has already seen T.S Darbari, the joint director general of the Organising Committee of Delhi 2010, and  M Jayachandran, the joint director general of finance and accounts, being suspended and the Indian Enforcement Directorate launching an investigation.

The Sunday Express in London reported today that the Queen is in a "cold fury" over the scandal, according to close aides.

A diplomatic source in India reportedly told the newspaper "The Queen’s goodwill in launching the baton in London has led to her being caught up in this matter although she is an innocent party."

Kalmadi has ignored calls for him to resign over the scandal.

He said: "We have been working for the past seven years when we got the Games.

"Now, most of the things are falling into place, I'm not going to run away.

"I have made a commitment to international community and the people of India that we will have good Games.

"Now, with 40 days left, I can't run away.

"No-one can organise these Games now.

"Let there be a probe.

"I have done nothing wrong.

"Why should I quit due to the media's drummed-up campaign.

"Let there be a probe a judicial probe.

"It can start now, I'm ready for it.

"It does not have to wait till after the Games."

But pressure, meanwhile, continues to mount on Kalmadi from overseas as well as in India.

Mike Fennell, the President of the Commonwealth Games Federation, has warned Kalmadi that he expects by next week guarantees for venues to be ready to host event for the Games, which are due to begin on October 3.

Fennell said: "By the time of my next scheduled visit to Delhi on August 18-19, we have asked the Organising Committee to secure a report from each of the Government agencies responsible for the delivery of venues that provides confirmation that all regulatory approvals including fire, health and safety have been secured for each venue."

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