Delays during the £100m refurbishment of the Savoy Hotel in London could lead to the job going over its budget.

The hotel's owners have admitted that the re-opening in the Autumn is now looking unlikely due to the discovery of higher than anticipated levels of asbestos.

The job is thought to have been let on a lump-sum contract which could lead to a legal wrangle over claims and counter-claims.

Events organisers who had booked the hotel ballroom for later this year have now been told the venue will not be ready.

A spokesman for Fairmont Hotels said: "We are still on target for a phased autumn/winter 2009 re-opening of the hotel and public areas.

"However, with a project of this magnitude and scope, and mindful of the sensitivity of our relationships with our long-term loyal client base - particularly with the Lancaster Ballroom - we have decided not to accept bookings for events this year in case, for any unexpected reason, a particular event room's re-opening was delayed."

Main contractor Chorus is expected to still be on site at the end of this year as the client now plans a "phased autumn/winter 2009 re-opening".