The Commonwealth Games Village in Melbourne has been redesigned mid-construction after complaints from the Games' international body.

The redesign was done after the London-based Commonwealth Games Federation complained the village would be overcrowded with the 6,000 athletes and officials staying there, sources told The Age newspaper.

The federation was also unhappy about the quality of portable buildings that were to house about 1,260 competitors and officials.

Under the new plan, more than 500 athletes and officials will stay in a heritage precinct - the former Royal Park Psychiatric Hospital - next to the village site.

The number of portable buildings has been reduced and the quality of the remaining portables will be improved.

Developer Australand will now refurbish former hospital buildings and build new homes, including single houses and townhouses among the heritage buildings.

Melbourne 2006 chief executive John Harnden denied there had been a major change of plan for the village.

"As with everything with the Games, you're continually working, continually refining and working forwards," he told the newspaper.

Commonwealth Games Minister Justin Madden would not reveal the cost of the change but said it would not blow out the $697 million government expenditure cap for the Games.

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