In this study, a simplified analytical closed-form solution, considering plane strain and axial symmetry conditions, for analysis of a circular pressure tunnel excavated underwater table, is developed. The method accounts for the seepage forces with the steady-state flow and is based on the generalized effective stress law. To examine the effect of pore pressure variations and also the boundary conditions at the ground surface, the formulations are derived for different directions around the tunnel. The proposed method can be applied for analysis and design of pressure tunnels. Illustrative examples are given to demonstrate the performance of the proposed solution and also to examine the effect of seepage forces on the stability of tunnels. The simplified analytical solution derived in this study is compared with numerical analyses. It is concluded that the classic solutions (Lame's thick-walled solution), considering the internal pressure as a mechanical load applied to the tunnel surface, are not applicable to pervious media and can result in an unsafe design. Copyright © 2012 John Wiley & Sons, Ltd.