Caborn said that he welcomed the fact that the future of the stadium was now settled but insisted there has been unnecessary cost to the public purse. Under the deal announced on Friday, West Ham will pay only ?15million for a 99-year lease on a stadium whose conversion costs will be ?150million to ?190million and whose overall cost could top ?630million.
Caborn told the Press Association: "This is the biggest mistake of the Olympics and lessons should be learned from this. West Ham are basically getting a stadium costing more than £600million for just ?15million and a small amount in annual rent (£2million)."
He added: "I do welcome the fact that the future of the stadium has finally been secured, but we should also realise that the public sector is picking up the tab.
"The mistake was made in 2006/7 when they (the Olympic Board) ruled football out of a retro-fit design as we has done successfully in Manchester with the Commonwealth Games stadium.
"I suggested retractable seating like the Stade de France in Paris but they insisted it should be a 25,000-seat athletics stadium.
"Time and again mistakes are made with Olympic Stadiums and the lessons should be learned for any future similar projects."
Caborn was sports minister at the time the design of the Olympic Stadium was agreed but campaigned unsuccessfully for it to be built with football in mind for the future.