London's Olympic handover festivities in The Mall were marred for hundreds of people when they were denied entry despite having tickets.

Security officers closed the entrance barriers to the 2012 party in front of Buckingham Palace, citing overcrowding, just before the most crucial part of the closing ceremony in Beijing, when Boris Johnson was handed the Olympic flag.

Mark Jensen, 28, from Fulham, West London, said that he was bitterly disappointed that he could not get inside. “I'm absolutely gutted, I've been looking forward to this for ages. If they can't organise this, how are they going to organise the Games?”

Organisers had used a ballot to distribute 40,000 tickets to the event, which included performances by some of the country's biggest music acts, but on the day said that there was not enough space for all the ticketholders. There were also problems with some of the screens, with the picture being lost for parts of the ceremony.

However, for the majority of the crowd the atmosphere was one of enthusiasm and patriotism, unseen since the capital's successful bid for the Games in 2005. As Mr Johnson received the flag, thousands of people began to chant: “Boris, Boris.”

Many of those who attended attributed the patriotic atmosphere to the medal haul in Beijing.

Marie Bell, from Essex, who was wearing a Union Jack hat and waving a flag, said that the capital had caught “Olympic fever”. “Everyone is on a high because of everyone doing so well in Beijing. Before, no one was that excited about the Olympics and everyone was just worried about whether we'd be able to afford it,” she said.

Margaret Hodge, the Culture Minister, also attended the celebrations in The Mall. She told The Times that the success of Beijing had changed the focus from funding concerns. “It's just a fantastic atmosphere here. There's enormous enthusiasm, it's reaching people that sports have never reached,” she said.

After the ceremony the crowd was treated to performances by artists such as Scouting for Girls, The Feeling, Sophie Ellis-Bextor and Will Young. The event ended with a flypast by the Red Arrows.

Brian Elliott, from Southampton, said: “It's been brilliant. We were glad that Boris didn't drop the flag. Though he could have tidied himself up and maybe buttoned up his jacket.”

Sir Keith Mills, deputy chairman of Locog, the 2012 organising committee, told The Times that the “penny had finally dropped” and Londoners were celebrating the opportunity of hosting the Games.