A report by City of Edinburgh Council said passenger services are expected to start in the summer of 2014.

The council said £669m has been spent on the project to date.

A revised timetable was drawn-up when work restarted in April 2011.

By then the project has slipped two years behind the original schedule and gone 40% over budget following a series of disputes between Bilfinger and original client Transport Initiatives Edinburgh

Bilfinger blamed the cost over runs on design changes and problems encountered during utility diversion work.

The contractor repeatedly clashed with TIE which was eventually scrapped by the council.

Transport Convener, Councillor Lesley Hinds, said: “This positive update demonstrates once again the excellent progress that has been made since the revised programme began.

“The tram is Scotland’s second largest infrastructure project and, as everyone knows, there have been a number of challenges to overcome.

“However, I’m very pleased that we are continuing to move in the right direction.”