The Treasury is to remove superstar Usain Bolt's tax shackle, allowing him to compete in a special London athletics event without being financially punished for doing so.

The announcement means overseas Olympic favourites like the 100m world record holder will now receive a one-off exemption from UK tax rules - which usually seek a cut from a foreign athlete's global earnings as well as payments received for competing on British soil - when they perform at the Diamond League event at the Olympic Stadium on 27 July, a year on from London 2012.

Bolt, a fan favourite, has previously been quite vocal of his dislike of UK tax laws that effectively sees him having to pay to race on these shores, but speaking to The Telegraph, Chancellor George Osborne said: 'The government is determined to do everything possible to secure the Olympic legacy and I am delighted to grant this exemption.'

Bolt's agent, Ricky Simms, welcomed the tax exemption, saying: 'It's good news for the Diamond League meeting and British sport in general. The rules were discouraging a lot of the top stars from competing in the UK when they had options elsewhere.'