stv has learned that two of the companies which make up the construction consortium are unhappy with the third company - which has been accused of demanding an extra £80million before it begins work.
The Capital’s Princes Street was closed to traffic at 5am on Saturday, when workmen should have started laying the first tracks for the new transport system.
However, equipment lies unused as the wrangle between contractors Bilfinger Berger and tram bosses continues.
City leaders say Bilfinger Berger is holding Edinburgh to ransom, by issuing a demand for an extra £80 million just 48 hours before work on Princes Street was due to begin.
That claim is rejected by the German firm, who on Friday night issued a statement insisting tram managers are to blame for not completing the work to move utility pipes on time.
That in turn has been denied by tram managers, who insist all preparatory work has been finished and the street is ready for track-laying to begin.
Handing out leaflets to shoppers on Princes Street on Saturday, the Scottish Conservatives insist speed is of the essence in the dispute.
David McLetchie, MSP for Edinburgh Pentlands, said: "Princes Street is the main thoroughfare of the city. Virtually every bus route in Edinburgh comes in and out of Princes Street. It is the hub of the city that binds it together in public transport terms. That's why this job has got to be done on schedule - to minimise that disruption for traders, businesses, and the good people of this city."
This dispute will do nothing to keep the project on track to be up and running by 2011, nor to be completed within budget.
The SNP government, who initially opposed the project, has capped taxpayers’ contribution at £500million.
It is likely any shortfall will have to be met either by property developers or the council tax payers of the Capital.