PARIS — A hush fell over a crowd of thousands of Parisians gathered expectantly outside City Hall on Wednesday as rival London defeated the French capital in a hotly contested battle to host the 2012 Olympics.

Raindrops began falling just before the announcement, and dejected spectators folded up French flags and streamed away from the square after Paris failed in its third attempt since 1992 to bring the Games back to the city, which hosted the Olympics in 1900 and 1924.

French President Jacques Chirac, who had travelled to Singapore for the city's final presentation to the IOC, learned of the defeat aboard the plane carrying him to the G8 summit in Scotland.

Chirac congratulated London and wished "good luck and full success to the authorities and British people,'' his office said.

Chirac "thanked the whole Paris 2012 team for the formidable work it accomplished, for its commitment, professionalism and the spirit of fair-play that guided them.''

In Paris, onlookers had stood with their fingers crossed for good luck, watching on two giant screens set up outside the ornate building as the International Olympic Committee announced the decision in Singapore.

As the announcement came, many looked stunned. Some cupped their faces in their hands; others stood silently watching scenes of jubilation erupting in the British capital or staring vacantly for up to 20 minutes at the empty podium -- a stark contrast to the carnival atmosphere that was evident earlier in the day.

"We are very disappointed,'' said Alexis Vilarino, 34, a Parisian salesman. "I think we deserved the Games. But we have to congratulate London. It was fair play -- the best one won.''

Paris failed in earlier bids to win the Olympics back in 1992 and 2008. It had been considered a heavy favourite going into Wednesday's IOC voting.

Anne Hidalgo, the No. 2 official at City Hall, came up to the podium and thanked the crowd for coming out.

"We believed until the end. We were proud of our work and . . . the strength of our presentation,'' she said. "I think everything was done that could be. The coming days and hours will be sad ones for us.''

As she extended congratulations to Londoners, the crowd responded with jeers and boos.

Many in France, struggling with high unemployment and a lacklustre economy, had hoped a victory would lift the nation out of a funk. That the loss was to London was even harder to take for some in a country with a history of testy relations with its neighbour across the English Channel.

NBA star Tony Parker said Paris' loss proved the IOC had an Anglo-Saxon bias.

"It's been three times now that Paris has been refused -- 1992, 2008 and 2012. I find that bizarre,'' said Parker, who plays for the San Antonio Spurs. "We did everything we had to do. I don't know what more we could have done.

"It proves that the committee is Anglo-Saxon. They prefer the English.''

The French capital, which hosted soccer's World Cup final in 1998 and the world track and field championships in 2003, had pinned its hopes on its glamour and its ready-to-go venues, such as the 80,000-seat Stade de France and the Roland Garros complex, which hosts the French Open.

"I feel disappointment; a bit of anger, too,'' said Loyola Ranarison, 27, who works for an Internet company. "In London, they don't even have all the infrastructure yet. I don't understand at all what happened.''

French Baron Pierre de Coubertin is considered the father of the modern Olympic movement. His heart is entombed in a marble pillar near the stadium at Greece's Ancient Olympia.

"It's too bad,'' said Jacqueline Commissaire, who waited outside City Hall with her husband for what they hoped would be a victory celebration. "We hoped until the end.''