Clapham Junction could be on the Tube in time for the London Olympics and save taxpayers £10million in the process - if officials can agree funding for the project by September.

Department of Transport (DfT) is expected to fund the majority of the £100million phase two of the East London Line extension - connecting Clapham Junction to Docklands on the London Overground network - and is in "ongoing" talks with Transport for London (TfL) and Boris Johnson, the Mayor of London.

The talks are aimed at allowing builders to "roll-on" to phase two when phase one is completed in 2009.

With builders' cranes, personnel and heavy machinery already in use TfL estimate a £10million saving if work could roll-on.

But initial "enabling work" to clear land and prepare the work area has to start almost immediately - hence the September deadline.

A TfL spokesman said: "We need to agree funding for initial enabling work by September as this will allow the builders to continue working.

"But we still need DfT to pay for the lions share of the £100million needed for phase two. If we can agree it, it will be ready for the Olympics."

A DfT spokesman remained noncommittal.

He said the DfT agreed a funding settlement with the mayor until 2018 and it was up to TfL to set its own transport priorities.

But he added: "The DfT does recognise the East London Line project will bring some important benefits to the national rail network and we will continue to discuss the issue with TfL."

If the scheme does get the green light, Londoners will be in the novel position of having a major civil engineering project delivered ahead of schedule.

And longsuffering Wandsworth commuters - who have watched green-eyed as money has been ploughed into rail infrastructure north of the river in the form of the Olympics, Thameslink and Cross Rail - would have some much needed good news.

Battersea MP Martin Linton, whose constituency covers Clapham Junction, is pressing the mayor for action.

He said: "He needs to act now. It's vital that this scheme goes ahead. Negotiations had already been going on for months before the election and Ken Livingstone was close to a deal.

"It supplies the missing link in the long-desired London Orbital network and it has huge regeneration benefits for all the deprivation blackspots in south London."