Pumping a mud slurry to the face chamber in a microtunnelling machine both allows the slurry pressure in the chamber to support the tunnel face and allows the excavated soil to mix with the slurry and be pumped to the ground surface via a return line. The excavated soil is then separated from the slurry and the slurry returned to the excavation face. A slurry system can be used in small diameter microtunnels but methods must be incorporated into the microtunnel machine to reduce the excavated material to a size that can be pumped through the slurry line.