Mayor of London Boris Johnson says he is still keen on a Tramlink extension but funding remains an issue.
Mr Johnson was responding to an open letter from Richard Plant, chairman of the Develop Croydon Forum.
Mr Plant called for the Crystal Palace Tramlink extension to be funded in the Transport for London (TfL) Business plan.
The mayor said Crystal Palace, Sutton and Bromley had been identified as three potential priorities for network extensions.
In his open letter, Mr Plant, of Stiles Harold Williams, said he was encouraged by the commitments the mayor has made for the region.
He added that Tramlink has improved the connectivity and accessibility of much of south London.
Mr Plant said: “In recognition of the essential role the tram network now plays in the economies of the town centre and the wider sub-region we urge you to fund the Crystal Palace Tramlink extension in your forthcoming Transport for London Business Plan.”
Mayor of London Boris Johnson said TfL is working closely with Bromley, Croydon, Merton and Sutton to look at the potential economic benefits of a network extension.
Mr Johnson said consultation with certain boroughs will continue until June this year.
He said: “I am keen to see the extensions to the Tramlink network go ahead but, as you will appreciate, funding is the main obstacle to delivery given the many competing demands for funding which TfL is faced with.
The Mayor added that short to medium-term enhancements to Tramlink had been included in the draft business plan.
“£30m has been allocated to removing sections of single track, building an additional Tramlink platform at Wimbledon and the purchase of four new trams.
“These improvements will increase capacity and enhance reliability on one of the busiest sections of the Tramlink network, and will facilitate the extension of Line 4 services to Wimbledon.”