David Cameron has pledged to "go after" G4S over the Olympics security chaos as the Government targeted the firm's multimillion-pound management fee.
But the Prime Minister also appealed for people to remain positive about the Games, insisting the controversy and heavy rain would not stop the UK staging a "great" event.
The row over security continued to overshadow the build-up the day after G4S boss Nick Buckles made an humiliating appearance before MPs. While the chief executive admitted that there would be financial consequences from the company's failure to recruit enough staff, he insisted it wanted to keep a £57 million management charge.
However, sports minister Hugh Robertson said the government was activating "all penalty clauses" in the contract. He told a press conference in Westminster: "The penalty clauses apply to the whole contract, including the management fee."
Despite calls for Mr Buckles to fall on his sword, Mr Robertson said he should stay in his post for now to provide "stability" during the Olympics.
"I don't want resignations causing chaos. What happens to Mr Buckles afterwards is a matter for others in the post-Games environment," he added. "What is crucial now is that he and his organisation concentrate absolutely on delivering a safe and secure Olympics. I have confidence in their ability to do so."
His comments came amid reports that a request may be made for up to 2,000 additional troops to plug any further gaps in security if G4S's problems become more severe. The Ministry of Defence, which has already upped its contribution by 3,500 to 11,000, said that contingency plans were in place to increase the numbers again if necessary.
Speaking on a visit to Afghanistan, Mr Cameron said: "Let's be clear, if G4S don't fulfil their contract we will go after them for the money to make sure that they help pay for the military personnel that have been brought in."
Mr Cameron denied that London was in danger of becoming the "soggy" Olympics, stressing the achievements of delivering the park on time and on budget.
"Let's not call this the wet and soggy Olympics, it is a great moment for our country," the premier said. "Yes, there are challenges and the military have stepped up to the plate and I salute them for it. Let's not call it a soggy Olympics, let's call it a great Olympics."