Rome: Rome was forced to drop its bid for the 2020 Olympic Games following Italian Prime Minister Mario Monti's announcement that his government would not provide the requested financial guarantee for the city's ambitious campaign.

Monti announced on Tuesday after a cabinet meeting that the government had to be responsible for the taxpayers.

"After careful consideration, this government has reached the unanimous decision that, given the current economic climate, we believe it would be irresponsible to assume such a guarantee," Monti said.

"We don't feel it would be wise to make such a financial commitment now, as it could jeopardize Italy's financial situation in the upcoming years. Had these been more prosperous times, we would have been more than willing to take the risk, but, today, no," he said.

The decision came a day before the deadline for filing formal submission of bid to the International Olympic Committee (IOC). The IOC requires government financial guarantees from bid cities.

Gianni Petrucci, president of the national Olympic body CONI, could not hide his disappointment at the government's decision.

"We have lost a tremendous opportunity. But we have no choice but to accept the government's decision. I am very sad," he said.

"The decision took a lot of time to weigh up and was made purely on economic grounds. Our project was an extremely serious one, but the government was absolutely steadfast on the financial aspect," he added.