Tunnel excavation can be simulated by cylindrical cavity contraction due to the comparability between tunnelling and cavity contraction. The linear elastic-perfectly plastic analytical solution is obtained based on the theory of critical state soil mechanics proposed by Yu[1]. The relationship between the support pressure and ground loss and the maximum surface settlement is given based on the theory of tunnelling. Comparisons have been made between the computed results of the analytical solution and centrifuge tests results conducted by Grant and observed values in some case histories at home and abroad. The results show that: this study is correct and rational; and the analytical solution can be used for predicting the soil deformation due to tunneling.