Construction of the £400 million Lee Tunnel could not start for another six months after Thames Water said it was not likely to choose a contractor this year.
A joint venture of Murphy and Hochtief is up against a team made up of Morgan Est, Bachy Soletanche and Vinci Construction Grands Projets to build the 7 km tunnel.
The teams had been hoping to hear the winner this month, but Thames Water confirmed to Construction News this week that it has delayed the announcement.
A spokeswoman said that a winner was not expected to be announced before Christmas. But the spokeswoman said it was hoped construction would begin on site in April 2010.
Construction of the tunnel was scheduled to begin in January, but sources said the procurement delay would push work back by up to six months while the eventual winners drew up detailed designs.
Both teams are now expected to meet with Thames Water officials in the next couple of weeks.
The Lee Tunnel will run from Abbey Mills pumping station in Stratford, east London, to Beckton Sewage Treatment Works. It is part of a larger £2 billion Thames Tideway project to build a 32 km tunnel to capture the flows of storm sewage from 34 sewer overflow points along the Thames.