(Updates with reaction from federal government, industry)
By Paulina Duran
SYDNEY, Oct 25 (Reuters) - Victoria state, Australia's COVID-19 hotspot, on Sunday delayed an eagerly awaited announcement of the removal of lockdown restrictions for cafes, restaurants and pubs in the capital Melbourne because of an outbreak in the city's northern suburbs.
The restrictions have kept most retail businesses in Melbourne providing online services only since early August and 5 million people living under stay-at-home orders were hoping for an announcement on Sunday.
State premier Daniel Andrews told a media conference the outbreak would likely delay the reopening of retail and hospitality businesses by a few days, as officials preferred to wait for hundreds of test results.
He had planned to announce some restrictions would be lifted from mid-week but preferred to wait until there was more clarity about whether all known infections and expected positive cases from the tests were linked, Andrews said.
"We will get (the test results) today and tomorrow and hopefully we are able to make, not only announcements but to take the big steps safely around the middle of this week."
The federal government and industry leaders have been putting increasing pressure on Andrews to reopen the city and the state.
"We cannot go on like this," Business Council of Australia chief executive Jennifer Westacott said in a statement.
"Victorians cannot hang on week to week. People are at a financial and mental breaking point."
Health Minister Greg Hunt said Victoria was ready to ease restrictions, describing any delay as "profoundly disappointing".
"On the balance of evidence and risk, Victoria is in a sufficiently strong place to replicate that which has occurred in New South Wales (NSW)," Hunt told reporters, referring to the country's largest state which had reopened its economy.
On Sunday, NSW will host the largest public gathering since the pandemic began, a rugby game with 40,000 attendees.
NSW and Victoria each found seven new COVID-19 cases in the previous 24 hours. Six of the new cases in Victoria were linked to the northern suburbs outbreak in Melbourne, which has now spread across 11 households.
The 14-day moving average of new cases in Victoria fell to 4.6, below the threshold of five Andrews had previously set for the next band of restrictions to be lifted.
Australia has recorded nearly 27,500 infections and more than 900 deaths, a fraction of those in some other countries. Victoria accounts for over 90% of lives lost to the virus. (Reporting by Paulina Duran in Sydney; Editing by Grant McCool and Lincoln Feast.)