By Martyn Herman

LONDON (Reuters) - Thirsty Londoners can raise a glass to Olympic medal winners with an ale straight from 1908, when London first hosted the Games, after a local brewery discovered a 104-year-old recipe in dusty archives.

Six months of painstaking research by the Camden Town Brewery, a high-tech business crammed under a series of railway arches in north London, have resulted in the company bottling their own 1908 Pale Ale in time for Friday's opening ceremony.

On the day the Olympic torch relay reached White City, venue for the 1908 Games, staff at the brewery were working overtime to label 650 limited edition bottles of the nostalgic golden ale.

"We started thinking about it in 2011," Camden Town Brewery spokesman Mark Dredge told Reuters as the golden labels, sporting a 1908 Olympic high jumper, were being stuck to the bottles rolling off the production line.

"We thought about what ale would have been drunk at the time of the 1908 Olympics. We knew that there was a former Camden Brewery that was taken over in the 1920s by Courage so we started researching what they were producing.

"This is our resurrection of the sort of beer that was being drunk in London in 1908."

Yet the ale, which Dredge said he believed was named Elephant Ale at the time, in honor of the Elephant's Head pub that still stands in Camden Lock, was nearly lost forever.

The former Camden Brewery changed hands over the toss of a coin in the 1920s and was swallowed up by the Courage Brewery -- a chain that owned swarms of pubs across London.

"Luckily, after hitting on the idea of re-creating a 1908 beer we found a brewer's record in the archives, bound in a leather book, detailing the 1908 Pale Ale that was becoming increasingly popular at the time of the Olympics," Dredge said.

"We took the 1908 recipe, looked at it and worked out what the ingredients would have been like and found some modern alternatives," he added.

"We found that they used American hops as well as English hops and a specific yeast that was used in London at the time.

"This is an historic recipe, and very much an English flavor even though we used American hops which were very fashionable 104 years ago."

Around 4,000 liters of the amber liquid are being produced and hopefully consumed during the fortnight of the Games as London's pubs gear up for an Olympic boom.

"There are lots of beers representing 2012 but we thought it would be good to give people a taste of the Olympics past," he said. "It's also great that we unearthed an old recipe."

London's brewers are thriving despite the economic woes of the country, which is still gripped by recession.

There are currently 27 breweries in the capital, a four-fold increase in four years, according to Dredge.

"London's a major place for breweries at the moment, in 2005 there were maybe four breweries in London and now we are close to 30," he said.

"People are thinking more about what they are drinking and they don't just want fizzy lager."

(Reporting by Martyn Herman; editing by Toby Davis)