The multi-billion pound Crossrail project will not be ready for more than 10 years, the Government said.
Transport Secretary Alistair Darling has told the BBC the project, which will provide a much-needed link between east and west London, would clearly not be finished by 2012.
London faces a competitive race to host the 2012 Olympics, and the city's transport infrastructure could emerge as the vital aspect to the bid.
Mr Darling said it was too optimistic to suggest, as London Mayor Ken Livingstone has, that Crossrail could be finished within a decade.
The project is envisaged to provide a rail connection between Heathrow and east London, via Paddington, and will require construction of a large tunnel through central London.
The government has indicated it will make an announcement on progress with the project this week.
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