LONDON, Oct 30 (Reuters) - The London Metal Exchange's (LME) three-year-long flagship project to overhaul its electronic trading system faces up to a year of further delays and mounting costs, four sources with knowledge of the matter said.

Trust in LME management's ability to efficiently run the world's largest and oldest forum for metals shattered last year after a disorderly market forced the exchange to suspend nickel trading for the first time since 1988.

The project to revamp the LME's electronic system was due to go live in June this year. But in July the LME postponed completion to end-March 2024.

"The system isn't going to be operational by April, there are too many flaws," one of the sources said, adding that costs last year had already doubled from the amounts budgeted.

The overall budget for the project has not been disclosed.

"We recognise that some participants have requested extensions ... We will be sympathetic to such requests, even if this were to result in a short delay to target go-live dates," the LME said in response to a request for comment.

The exchange, owned by Hong Kong Exchanges and Clearing , did not give a new timeline.

Sources said the front-end trading platform developed by U.S.-based Trading Technologies does not work for the complicated structure of contracts on the LME.

In response to a request for comment, Trading Technologies said: "We would defer to the LME on this."

The problem comes from the LME's unique date structure which allows trading for any day between the cash contract and the benchmark three-month forward. Beyond that, metals including copper and aluminium, can be traded up to 10 years in the future.

Carry trades or price differentials between contracts along the maturity curve are crucial for consumers wanting to hedge their needs and producers aiming to lock in selling prices.

One important aspect, the LME said, is aligning its platform with other exchanges. "This of course means that the front-end interface will change to a more market-standard design – while still providing support for all of the LME's dates and carries."

(Reporting by Pratima Desai; editing by David Evans)