Edinburgh’s £500M tram project could be set for fresh delays as a dispute with German firm Bilfinger Berger continues with a threat to tear up the contract.
Councillor Gordon Mackenzie, the city’s transport convener, said the project is “on the brink” and may be heading for a court battle.
He said disputes with Bilfinger Berger over cost, timescale and changes to the route must be resolved within the month.
However any move to terminate the contract is likely to see the tramworks fall further behind schedule.
The tram line, linking Leith and the airport with 23 stops, is meant to be finished by 2012.
Mr Mackenzie said: “This city will not be held to ransom by this contractor any longer. There needs to be a move to settle the project’s contractual dispute within the month.
“There would be worse things for the project than for this contract to be terminated.”
Mackenzie said that if nothing happens in the upcoming weeks, he will recommend pushing for breach-of-contract procedures.
He also accused Bilfinger Berger of making “ludicrous” requests for an extra 30 months to complete works.
“Every major infrastructure contract includes normal design development and while we accept that there have been substantial changes to the design, the claims that this contractor are putting in are from the realms of fantasy,” he said.
“Furthermore their unwillingness to get the job done while this dispute drags on is unacceptable.
“If we don’t get an acceptable cost and programme soon I won’t be able to recommend the council continues its support for the project with this contractor.
“We are at the brink. Personally I’m prepared for that and I also hope the consortium recognise it as well but I’m not optimistic.”
Edinburgh Trams chairman David Mackay said: “I totally understand councillor Mackenzie’s position. We have been hugely frustrated by the lack of progress in settling this dispute and the subsequent lack of progress on the ground.”
The SNP Scottish Government, which did not support the tram plan in Parliament, has repeatedly confirmed the £500M scheme will get no extra funds.