British government ministers offered to pay for scholarships for athletes from developing nations and to take the wives of senior officials on a shopping trip to top London department store Harrod's if the world athletics governing body would allow them to switch the 2005 World Championships to Sheffield, a senior IAAF official said yesterday.

The senior source in the International Association of Athletics Federations (IAAF) said: "It was as if they were trying to buy us." Another official who attended the meeting, but who also asked to remain anonymous, said: "It smacked of crass colonialism."

A spokesman for Britain's Department of Culture, Media and Sport (DCMS) later confirmed scholarships had been discussed at the meeting. He said it was also suggested the IAAF might stage its 2005 congress meeting in London, including a reception hosted by Prime Minister Tony Blair at number 10 Downing Street, "to enjoy the benefits of being in the capital".

The spokesman confirmed that shopping at Harrod's was mentioned, but stressed there had never been any offers by government officials to pay for any items purchased.

The IAAF had awarded its 2005 World Championships to London. But on Friday, the British culture minister, Tessa Jowell, announced London would be withdrawn because of concerns over the spiralling price of building a stadium at Pickett's Lock and the costs of staging the event.

In an emergency meeting with IAAF officials on Friday, Jowell had offered to take the event to the Don Valley stadium in Sheffield but had the proposal rejected.

According to sources who attended the meeting, at one point Richard Caborn, the British sports minister, turned to IAAF president Lamine Diack, of Senegal, and offered to give sports bursaries to Africans. The normally calm Diack, a former Senegalese government minister, was incensed at this attempted inducement.

Yesterday, the DCMS spokesman justified the approach by saying, "The offer was linked into facilities at the UK Sports Institute - there are countries who do not have those facilities, we could offer scholarships to athletes from Africa."

Istvan Gyulai, general secretary of the IAAF, said, "We did not pay too much attention to these offers, because we were only interested in staging the athletics in London."

"There are other stadiums in Britain, and other cities, such as Manchester and Birmingham, which are more suitable for our championships. But it was clear that they wanted Sheffield."

Australia may step in with a bid to host the 2005 championships. Simon Allatson, chief executive of Athletics Australia, said yesterday three Australian cities could be contenders. They were Perth, which was already planning a bid to stage the championships in 2007, Sydney, which staged last year's Olympics, and Melbourne, hosts to the 2006 Commonwealth Games.

The IAAF was expected to invite fresh bids for 2005, with Berlin, Budapest and Tokyo among the likely contenders.