The head contractor on the Perth Children's Hospital project says it is complete, despite lead contamination issues.

Contractor John Holland has written to the WA Government to advise that it has achieved practical completion on the $1.2 billion project.

If the WA Government accepted the letter, it would mark the official end of the construction phase.

But the State Government says that is not the case, as there are still unacceptable levels of lead being found in drinking water on site.

Health Minister Roger Cook says the ongoing issue has not been resolved.

“There are still elements of the building that continue to get regular high levels of lead,” Mr Cook told Macquarie Radio.

“We have stepped into a steaming pile of contracts here.”

John Holland's claim could be the start of a legal stoush with the state.

Some say the contractor is attempting to hand off further responsibility for the lead issue, something the Government insists it will not accept.

The hospital is close to 18 months behind schedule, with delays largely due to repeated construction problems as well as the lead issue, asbestos-tainted roof panels and faulty fire doors.

John Holland says it is unable to comment on contractual matters.