Work on the Dublin Port Tunnel almost came to an abrupt halt in 2004 due to a dispute between the main contractor and Dublin City Council, a report out this morning has claimed.

The Irish Independent has reported that Mowlem threatened to stop work in May 2004 due to the dispute with the council over money.

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And, the paper reports, the feud is ongoing, with Mowlem seeking another €556m in additional payments from the council.

The final bill for the tunnel works rocketed from €260m to €751m and could soar to €1.25bn if the contractor's claim is upheld.

A spokeswoman for Dublin City Council told the paper both sides were in a "dispute resolution process" which had yet to conclude but, disputed the €556m figure reported.

She said the council was confident the final cost would remain at €751m.

(VB/JM)