'We're not going to get fleeced': Government fumes over light rail subcontractor's $1.2 billion claim

Mr Constance said the company was no different to the hundreds of contractors working for the people of NSW on other projects.

"We're not going to get fleeced by anyone, we're an angry customer at this point in time," he told media.

"They need to get back to work, desist in their go-slow and stop disrupting people and in particular, they've got to meet their obligations."

The light rail project, scheduled to open early next year, has been dogged by delays during construction, but has nevertheless impressed many with its potential to transform travel through the inner city.

The company is reportedly threatening to double the original $1.6 billion cost of the project, which will link the city to the eastern suburbs.

Labor Leader Luke Foley described the latest dispute as a"catastrophic, shambolic failure of delivery" by the government.

“A contract for $1.5 billion is going to come in at $3 billion, the project is two years late and the government is about to be mired in the courts, which means untold further delays and misery for small business people along the route," he said.

"They have to tell the public, they have to tell local residents and local business people what's being done to resolve this because at the moment this is disastrous."

Deputy Leader of the Opposition and Shadow Minister for Planning Michael Daley criticised the government for "rushing the project".

"If the government had done its homework, if the government had planned this properly, there would be no dispute," Mr Daley said.

In a statement to Fairfax Media on Saturday, a spokesman for Acciona said: “We have filed a claim in the NSW Supreme Court against Transport for New South Wales regarding Sydney Light Rail, and the matter will be first heard by the Court on Friday 13 April. As this is an ongoing legal matter, we do not wish to make any further comment.”

With AAP