Gary James wrote about it but not sure if anyone at the council ever confirmed it. Quite likely it did happen, it would be odd not to discuss what would happen after the games with any potential clubs, but it was probably only unofficially so there don't seem to be records of meeting agenda or even emails like you would have today. Not that emails are proof of anything, AS WE ALL KNOW. (Just putting that there for the hard of thinking journalists).
From my memory, I seem to recall that when Manchester was bidding for the Olympics the stadium design was much bigger (80k?) and there was also the backdrop of where the national football stadium was going to be built and that I only recall mention of the rags taking it on after but when it went to the Commonwealth design at only 40k there was less mention of them and then we were confirmed quite quickly. I suppose they were already at 55k (due to taxpayers money from Euro 96) so it probably didn't make sense at the time to move to a stadium which would be a similar size.