By Gavin Jones and Isla Binnie

ROME (Reuters) - Rome's new mayor, Virginia Raggi, pulled the plug on the city's bid to host the 2024 Olympics, saying staging the summer games would bury the Italian capital under mountains of debt and tonnes of cement.

The decision represents a blow to the International Olympic Committee, which has already seen Boston and Hamburg abandon their 2024 bids, and is struggling to convince potential host cities that it is worth putting on the sporting extravaganza.

Italian Prime Minister Matteo Renzi had championed Rome's challenge, but he needed the backing of the city council to press ahead. Raggi's decision means only Paris, Los Angeles and Budapest are left in the running to stage the 2024 games.

"It would be irresponsible for us to support this candidacy," said Raggi, whose anti-establishment 5-Star Movement took power for the first time in Rome after a landslide victory in local elections in June.

"We have nothing against the Olympics and sport ... but we don't want sport to be an excuse for more rivers of cement in the city. We won't allow that."

Rome's bid team reacted furiously, saying the decision had been taken for "ideological, political and demagogic" reasons which would deprive the city of investments worth up to $1.7 billion and the creation of nearly 200,000 jobs.

"We are disappointed that a new political force is unwilling to accept the challenge of modernization," it said in a statement, adding that the decision represented "a severe blow to Italy’s credibility worldwide".

Boston pulled out of the race over financial concerns and the residents of Hamburg voted against a bid in a referendum. The 5-Star Movement had always voiced doubts about staging the sporting spectacular, but Italy's Olympic committee had held out hopes of changing the mayor's mind.

Italian Olympic committee chief Giovanni Malago had been scheduled to meet Raggi on Wednesday, but he left city hall after waiting for half an hour, saying she had not turned up.

Raggi, whose first months in charge of Rome have been chaotic, with key staffers leaving and several important posts still unfilled, said she had been delayed and regretted Malago's decision not to wait for her.


She told reporters that the Olympics often ran over budget and said Rome could not afford such a huge undertaking, adding it would have left Rome with sports arenas it did not need.

"We won't be forced to pay for more cathedrals in the desert for years to come. Romans don't want that," said Raggi, whose party has positioned itself as a bastion of honesty.

Revelations of systematic corruption involving Roman politicians, bureaucrats and businessmen in late 2014 prompted doubts about whether the city could handle work associated with the Olympics in a transparent way.

Rome had also bid to host the 2020 Games, but then-prime minister Mario Monti withdrew due to concerns over Italy's finances.

The Olympics movement is concerned the Games is losing its luster, with a pattern of cities pulling out of bidding for both summer and winter Games after baulking at huge costs required.

Brazil spent about $12 billion on the Rio Games last month, which proved a sporting success but was marred by complaints over budget overruns and infrastructure delays.

The International Olympic Committee's "Agenda 2020" aimed to cut the cost of the Games and make bidding more attractive, but has failed to stop cities withdrawing their candidacies, scared off by the size, cost and complexity of the event.

The International Olympic Committee is due to select the 2024 host city in September 2017.

Budapest said on Wednesday it would fight to the end to clinch the Games.

"Budapest will be at the finish line for sure and will remain a candidate throughout. We entered this race to win it," Budapest organizing committee chairman Balazs Furjes said.

(Additional reporting by Karolos Grohmann in Berlin and Marton Dunai in Budapest; Writing by Crispian Balmer; Editing by Mark Bendeich and Andrew Roche)