The Sunderland extension was opened by the Queen

Metro operator Nexus is disputing a �28m claim for work done on the extension, opened by the Queen in May 2002.

Railtrack was the main contractor on the massive project to link with light rail network with Wearside.

But now Nexus's annual report reveals Network Rail is making a series of claims for work on the contract, which add up to an extra �28m.

Nexus says it is disputing the claims. It may also make its own claims against the company for delays in completing the extension - which has failed to attract expected passenger numbers.

The row is revealed in the annual report and accounts of Nexus, which state: "Nexus has received a number of unsubstantiated claims amounting to approximately �28 million from Railtrack Plc on the project agreement for the Metro extension into Sunderland.

'Complex nature'

"An amount of �300,000 has been provided in the accounts.

"The balance of �27.7m has not been provided in the financial statements as the directors are of the opinion that due to Railtrack's inability to substantiate the claim, it can be successfully resisted."

A Nexus spokesman said: "The note which accompanies our annual accounts is clear and, due to the complex nature of this matter, we are not in a position to comment."

A spokeswoman for Network Rail said: "We are in discussions with Nexus about a number of outstanding issues. It would be inappropriate to comment further at this stage."

In a report to the Tyne & Wear Passenger Transport Authority, he says: "The matter continues to be actively discussed with Railtrack."

Passenger numbers are slowing improving on the Sunderland extension, which saw 12 new stations and nine miles of additional track running from the existing Pelaw Station in South Tyneside in April 2002.