There are claims today that Edinburgh's trams could be two years late and more than £200million over budget.

Lothians SNP MSP Shirley Anne Somerville claims sources close to the project have told her the total cost could run to £750million.

Tram chiefs have reacted angrily to the claim, insisting that the programme "is making good progress and is on track".

But Ms Somerville claims TIE has been unable to give a firm answer on accurate costs and timelines due to 400 disputes over the project which are yet to be resolved.

And she hit out at the tram firm's claim it would be able to give councillors more accurate financial information in 2010.

She said: "In the meantime the council are being asked to write a blank cheque for this project at the very time when financial resources are under pressure.

"With years of construction still to run I do fear that what we know to date is the tip of a financial iceberg. It's time that the MSPs and councillors who voted through this project take some responsibility for their decision. The Scottish Government has made plain that they will not put a penny more towards completion. It is up to those who insisted we press ahead with this ill-thought out scheme to say where the money is going to come from and to admit that to the people of Edinburgh.

She also expressed concern that escalating costs could impact on public services in Edinburgh and called for a "cast-iron guarantee that no money will be diverted from schools and frontline services to pay for trams."

However, TIE has hit out at Ms Somerville for releasing information which the firm claims is "incorrect and deeply damaging".

The firm also insisted there was "categorically nothing to suggest" that the project would run on later than 2012.

TIE spokeswoman Mandy Haeburn-Little said: “The programme is making good progress and is on track to be clear of Princes Street at the end of November as planned.

"Our progress continues to be reported regularly and robustly through the Board. For Shirley Ann Somerville to be suggesting that there is some other information being held back is ridiculous and unhelpful.

"If  Ms Somerville would like to name her sources and the information that she has then we would be very pleased to respond fully – until then regrettably we are merely arguing the semantics of rumour”