"We are obviously disappointed because it would have been fantastic to have Team GB in Bath," said Ged Roddy.

"We have athletes who are training for 2008 and 2012 here and they will carry on training and are a big part of our focus.

"Of course we think the BOA has made the wrong decision."

Roddy said he had not yet given a thought to hosting a team from another country.

"It's too early to say who we will be hosting instead and that process will be handled by the London 2012 Committee," he said.

Don Foster, the Olympic spokesman for the Liberal Democrats who is the MP for the city, said he still hoped some of Team GB's Olympians or Paralympians could benefit from the University's elite facilities.

He said: "It's a disappointing decision but there's still a lot to play for.

"I have been given personal assurances there will be detailed discussions about a role for the University in the next few weeks.

"It is highly possible some athletes may choose to train in Bath anyway and we may be able to cater for a surplus capacity.

"If we have a foreign team that will enable us to develop long-lasting relationships with that country, with significant long-term business, tourism and sporting benefits."

The announcement that Aldershot was chosen ahead of Bath and Loughborough University has also dismayed the business community.

Nigel Hutchins, chief executive of Business West, said: "It would have been wonderful to host Team GB but there's no doubt there will be a high-performance team of one type or another in Bath using its superb facilities."