A spokesman for Westminster’s Department of Culture, Media and Sport, which is overseeing the delivery of the London 2012 Olympics, revealed that sites other than the Castle had initially been considered.
He said: “Other locations, aside from Edinburgh Castle, were considered in the National Galleries of Scotland complex.
“But it was agreed in consultation with Scottish Government, Historic Scotland, Edinburgh Council and local stakeholders that the Castle was the preferred location.”
Deputy city council leader Steve Cardownie has led opposition to the plan calling it a “nonsense” and vowing to “send them home to think again”.
Meanwhile, heritage chiefs criticised the proposal and suggested there would never have been plans for Games organisers to deface the Acropolis in Athens or the Forbidden City in Beijing.
The Architectural Heritage Society of Scotland said plans to fix the huge symbol to the north face of the Castle ramparts would be a “crude connection” to London 2012 and hamper visitors’ enjoyment of the famous monument.
Euan Leitch, vice-chairman of the preservation society, called on Olympic chiefs to explain why the Castle should become an advertisement for London 2012 when historic monuments in previous host cities had not.
He said: “The best that can be said about the proposed position of the Olympic symbol on Edinburgh Castle is that it will cause no damage to the historic fabric.
“It will be a visual intrusion, albeit temporary. Visitors to Edinburgh in the summer of 2012 will be unable to take photographs of that famous view without the logo and at least you can crop the temporary stands for the Military Tattoo out of frame.”
He added: “It’s a crude connection to the London Olympics compared to the well thought out ‘Speed of Light’ event planned for Arthur’s Seat.
“It’s notable that neither the Athenian Acropolis nor Beijing’s Forbidden City received the Olympic branding and the question remains, why should our historic site?”
Asked to comment on the plans for the Castle, a Scottish Government spokesman said: “It is for the relevant statutory authorities, the city council and Historic Scotland, to determine the application.”