St Clement's Street in Oxford has collapsed and subsided within months of being resurfaced by council contractors.
The surface of St Clement's Street in Oxford is once again blighted by potholes
Outraged traders say business was dramatically hit by the road closure last summer while Isis Accord, supervised by Babtie, carried out major resurfacing work.
County council engineers are unsure why the road is subsiding but are planning repairs within the next few days to patch up the crumbling surface.
Gordon Oswell, who owns Oxford Gas Log Fire Studio in St Clement's, said the street was now riddled with potholes and puddles.
He said blocked drains were adding to the problem by creating large pockets of flooding where the surface has collapsed.
He said: "The road closures have been bad for business but this situation is dangerous and it's getting worse.
"Pedestrians and cyclists are being forced out into the middle of the road to avoid the flooding.
"They are stumbling in the holes and getting drenched with dirty water when cars drive past.
"I call it St Clement's Lakes."
Kenny Moore, of the printer's Presto, said people living in St Clement's often risked getting drenched by passing cars when they opened their front doors.
Giles Power, who owns St Clement's Antiques, said: "The roadworks caused so much loss of business last year - there was a dramatic loss. I'm outraged that we may need to go through all that again."
Council principal engineer Patrick Mulvihill said the road had been dug up several times by other agencies since the resurfacing scheme.
He said: "We suspect the foundations might have been affected by leaking water mains."
Thames Water spokesman Neil Tennant said: "We will investigate this matter."
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