The main contractor behind the new Wembley Stadium has admitted for the first time that the breakdown in relations with North-East engineering firm Cleveland Bridge has caused difficulties for the £757m project.

Speculation has been rife that an on-going row between Multiplex and Cleveland Bridge, which was supplying and fitting much of the steelworks for the London project, could put the building work behind schedule.

This weekend, Multiplex admitted that there had been "slippage" with on-site steel work following the withdrawal of Cleveland Bridge and the subsequent hand-over to Dutch company Hollandia.

But a spokesperson for the principal contractor insisted yesterday SUNDAY that the hitch had not caused any delay to the over-all project. "The stadium will still be ready to open in January 2006. The over-all project is totally on course and will be to schedule, in fact we are working to deliver it ahead of schedule," he said.

Cleveland Bridge withdrew completely from the Wembley project in June. Ten days ago 200 steelworkers employed by the Darlington-based firm and taken on by Hollandia, lost their jobs after a dispute over pay and conditions.

Last week a further 18 workers, believed to be site foremen, managers and supervisors, that had been seconded to Hollandia had their contracts terminated.

Cleveland Bridge was given a formal 31 days at the beginning of August to complete the orderly hand-over to Hollandia.

With the process drawing to a close this week, Multiplex admitted that there had been a shortage of steel-workers on site, with only 80 to 100 people available when at least 150 workers were required to do the job.

"Last week there was minor slippage while the new workforce was being introduced," said a Multiplex spokesman.

"We have had a new team come in and they have to get up to number and up to speed. The same work that was being carried out by Cleveland Bridge is being done by Hollandia and we have every confidence in Hollandia being able to deliver on time."

Cleveland Bridge has taken legal action against Multiplex through the Court of Technology and Construction, claiming Multiplex has repeatedly gone back on their contractual agreement and owes the engineering company millions of pounds.

A spokesperson for Cleveland Bridge said the company has four months to prepare a statement of case to deliver to the court.