NSW's transport agency has accused the Spanish company building Sydney's troubled light rail project of launching a $1.1 billion lawsuit against the state because the contractor is liable to pay “substantial sums” in damages for the project running late.

Transport for NSW also claims that Acciona knew before signing the construction contract in 2014 for the $2.1 billion light rail project that how to deal with underground utilities along the route of the line would not be fully known until well after the agreement was signed.

In its $1.1 billion lawsuit, Acciona has claimed that Transport for NSW painted a misleading picture of the work needed to win the agreement of utilities companies such as Ausgrid before contractors could shift underground cables along the route of the line.

But Transport for NSW has alleged in court documents that Acciona and its partners knew the project's designs would be subject to assessments of the utility services, and “any requirements” of companies such as Ausgrid, after the construction contracts were inked.