The Manchester Velodrome, Great Britain's National Cycling Centre, has profited from the government's decision not to build the UK's first 'supercasino' on neighbouring land.

Instead, US$29.6 million will be invested into a BMX cycling arena and a training base for British Olympic athletes to use in the build-up to the 2012 Olympics in London.

Manchester City Council, which has engaged regeneration company New East Manchester as a partner, has promised the money and invited companies to bid for the contract.

The arena, which will hold 4,500 spectators, will be built on land currently serving as a car park at the Velodrome, at the heart of Manchester's 'Sportcity'.

"We are clear in our aspiration to deliver a world class indoor BMX centre that will offer a home for the British BMX team for the 2012 Olympics and beyond," said Eddie Smith, chief executive of New East Manchester.

"Athletes who benefited from Sportcity facilities won over 60 medals at the Beijing Olympic and Paralympic Games last year.

"We are confident that with the right facilities we can help even more talented athletes achieve their dream."

BMX star Shanaze Reade was one of Britain's brightest medal hopes in the event's first Olympic outing at the Beijing Games, before dramatically crashing out of a guaranteed silver medal position in a bid to snatch an unlikely gold.

A special track was built for her at the Velodrome in the build-up to the Games, but organisers found it impossible to stop local children using the track at night.

"It was a challenge to keep them off it," said David Brailsford, British Cycling's performance director.

British Cycling chief executive Peter King told The Times newspaper that the Velodrome was struggling to cope with the increased interest surrounding cycling after Britain won twelve cycling medals at the Beijing Olympics, including seven golds.