Security firm G4S said it had agreed to waive a further £20 million in fees following the personnel fiasco at the London Olympics.
The group previously admitted it expected to lose as much as £50m on its £240m contract to supply guards for the global sporting event last summer.
Failings in the days leading up to the event resulted in the army being called in to plug gaps, and chief executive Nick Buckles making an appearance before a House of Commons select committee to defend his firm’s record and right to take its full fee.
But now the firm has revealed that it expects total losses on the deal to reach £70m after it agreed a new financial settlement with games organisers Locog.
It also said it had incurred additional costs of £18m related to “charity donations, external fees and the cost of sponsorship and marketing”.
“The main difference between the previous estimate and the final settlement is an agreement to waive a larger proportion of the project management charge,” it said.
G4S whose 2011 turnover reached £7.5 billion announced a donation of around £2.5m to armed forces charities and sporting organisations in August.
However, it also accepted that it would be forced to cover the cost of the backfilling of its shifts which were ultimately required to be undertaken by the police and military.
The losses booked by G4S include £48m paid to cover step-in costs by the uniformed services and £37m for project management failures, Locog said.
The games organisers’ chief financial officer Neil Wood said the agreement had helped create total public purse savings of £102m on venue security.
Mr Buckles said the games had been a “great success” for the UK and he was disappointed his company found itself in the position it did.
“We have accepted responsibility for the security workforce issues and, as a result of the settlement terms which we have announced today, have ensured that the overall cost to the taxpayer has been reduced significantly against the planned cost,” he said.
“The UK Government is an important customer for the group and we felt that it was in all of our interests to bring this matter to a close in an equitable and professional manner without the need for lengthy legal proceedings.”
G4S, which has operations in more than 125 countries and over 657,000 employees, said it had supplied some 80% of the manned security service it had been contracted for over the course of the pre-games, games-time and post-games periods.
Two directors resigned in the wake of an independent review into the company’s botched contract. Investors remained untroubled by the news, with shares up 0.1p at 280.4p.