Some 50 out of 63 assemblymen voted in support of the Olympics, while 10 were against them and three abstained from the vote.

The official bid must be sent by mid-September. The International Olympic Committee will select five candidates next year and the winner will be elected in October 2009.

"Our studies conclude that the Olympic Games may be profitable for Prague," Prague Mayor Pavel Bem said.

Bem said that the decision was only the first step towards the bid and that Prague can withdraw its application during the process if it comes out that the Olympics would not be good for the city.

"The Olympic Games must bring a profit. If Prague would have to get indebted over them, we will not organize them," Bem said.

As Prague is applying to host the Olympics for the first time, and another European city London would already have staged the preceding event in 2012, Prague's present candidacy is considered rather as a preparation for the bid for the Olympics in 2020 or 2024.

Anyway, candidacy in 2016 would be a marker which would increase the Czech capital's chances four years later, Bem added.

The City Hall, along with the Czech Olympic Committee (COV), want to establish a new company, Praha Olympijska (Olympic Prague), which would secure the candidacy's organisation. The city will put 15 million crowns in the organization.

According to a 2004 study, Prague Olympics would cost some 136 billion crowns ($1=21.016 crowns) and make a profit of 25 billion crowns.

Apart from this, the country would have to invest further 490 billion crowns in infrastructure.