SAN DIEGO - The lining of a 23-mile segment of the All-American Canal in Imperial County, a controversial project that would bring more water to San Diego County but decrease the supply for Mexican farmers, is set to go forward this week after more than nine months of delay, it was reported today.

The 9th U.S. Circuit Court of Appeals on Thursday denied a petition by the city of Calexico to reconsider the court's April 6 ruling allowing the project to go forward, The San Diego Union-Tribune reported.

The city had argued that its residents would be harmed economically and environmentally by the lining project. Calexico is heavily dependent on cross- border commerce from neighboring Mexicali and has joined efforts with a Mexicali business group and California environmentalists in opposing the lining.

The project could save 56,000 acre feet of water from seeping into the ground every year. But in doing so, Mexican farmers will lose that ground water they have counted on for decades.

The lining opponents have said they are prepared to take their case to the U.S. Supreme Court. Calexico City Attorney Jennifer Lyon said last week that "all litigation strategies will be discussed with my council on June 5," the newspaper reported.