In the meantime, Scotland Yard detectives announced the arrest of a 29-year-old man on suspicion of fraud "following allegations by West Ham United and the OPLC in respect of the unlawful obtaining of information".

Ford told the London Assembly's Economy, Culture and Sport committee: "My board were put under surveillance by Tottenham Hotspur and the chairman of Tottenham Hotspur felt confident enough to say in The Sunday Times several months ago that all 14 members of my board were put under surveillance.

"The Metropolitan police are now conducting an investigation into that surveillance.

"There has been all kinds of behaviour here that I could not have anticipated which, believe me, has not been pleasant in the last 12 months."

Tottenham rejected Baroness Ford's comments and issued a statement through their lawyers, which read: "The club did not undertake, instruct or engage any party to conduct surveillance on any member of the OPLC Committee and we consider the making of this baseless accusation to be wholly inappropriate and irresponsible.

"We totally reject the accusation in the strongest possible terms."

Dee Doocey, the Committee chair, responded to Ford's statement: "The very idea of your Board members being put under surveillance...it almost beggars belief that this thing can happen...it is absolutely disgraceful."

The Board members include social entrepreneur Lord Mawson, lawyer and London Marathon chief executive Nick Bitel (pictured), marketing expert Liz McMahon, former Arsenal managing director Keith Edelman and the Mayor of Newham, Sir Robin Wales.

Detectives, who have been investigating the claims since August 2011 said the suspect was arrested at an address in Sussex and was taken into custody at a Sussex police station "where he remains", a spokesman said.

"As part of their inquiries, detectives have conducted searches at both a residential and business premises in Sussex, a second private address in Sutton, and a further business address in Westminster," police said.

"An amount of material was seized during the searches."

A deal with West Ham and Newham Council to use the stadium in Stratford, East London, after the 2012 Games, collapsed last month amid legal challenges, with the Government announcing that the Stadium would remain in public ownership.

Tottenham had already lost out to West Ham in the race to become the OPLC's first choice to move into the stadium after the Games.

Challenges by Tottenham and Leyton Orient, plus an anonymous complaint to the European Commission, had led to fears that court action could drag on for years while the stadium remained empty.

A new tender process is being launched by the OPLC and the showpiece venue, complete with an athletics track, will now remain in public ownership and be rented out to an anchor tenant.

Baroness Ford told the London Assembly's Economy, Culture and Sport (ECS) Committee: "I am expecting the unexpected because that is what the last 12 months has taught me.

"Our job now is to narrow as far as we possibly can the scope now for legitimate legal challenge in this next process – that is all that we can do."

Ford added: "Given what I've learned over the past 12 months, I'm not confident there will be no further challenges," she said. 

"If people want to be vexatious, frivolous, malicious or whatever, they will do that...whatever we do as a public authority is likely to be challenged."

Ford had begun by explaining that the previous bidding process had been untenable once an anonymous challenge had been lodged with – and accepted for scrutiny by – the European Commission, which could have meant a further 18 months of delays.

"It was quite sickening that it was an anonymous complaint," she added.

"From someone who didn't have the backbone to stand up and claim their view."

Ford denied suggestions that the West Ham bid, which included a £40 million ($62.5million/€45.8 million) loan from Newham Council, had collapsed.

"Newham's bid did not collapse," she said.

"We closed down the competition because we couldn't guarantee the timescale."

Ford and Andrew Altman, the OPLC's chief executive, added that their intention was to establish a value-added version of their original template, which had an established athletics track.

A number of commercial options are being considered to lessen the requirement for subsidy, including music concerts and naming rights, with details likely to emerge following the OPLC board meeting at the end of the week.

UK Athletics now has a 99-year lease on the stadium to operate it during periods when their competitions take place.

Altman added that Newham were still "very interested" in involvement with the stadium project.

Asked if that meant the £40 million ($62.5million/€45.8 million) he responded: "It is at this point."

Ford said that the possibility of accessing further funds for the Olympic budget had been written into the original proposals, although it was the board's intention not to have to draw on it.

"But there is a possibility in the budget, should it be required," she added.

Contact the writer of this story at [email protected]