The development of a round liquid jet under the influence of a confined coaxial flow of an immiscible liquid of comparable density (central to annular flow density ratio of 8:10) was investigated in the vicinity of the nozzle exit. Two flow regimes were considered; one where the annular flow is faster than the central jet, so the central liquid jet is accelerated and one where the annular flow is slower, so the central liquid jet is decelerated. The central jet was visualised by high speed photography. Three modes of jet development were identified and classified in terms of the Reynolds number, Re, of the central jet which was in the range of 525 < Re < 2725, a modified definition of the Weber number, We, which allows the distinction between accelerating and deceleration flows and was in the range of −22 < We < 67 and the annular to central Momentum Ratio, MR, of the two streams which was in the range of 3.6 < MR < 91. By processing the time resolved jet images using Proper Orthogonal Decomposition (POD), it was possible to reduce the description of jet morphology to a small number of spatial modes, which isolated the most significant morphologies of the jet development. In this way, the temporal and spatial characteristics of the instabilities on the interface were clearly identified which highlights the advantages of POD over direct observation of the images. Relationships between the flow parameters and the interfacial waves were established. The wavelength of the interfacial instability was found to depend on the velocity of the fastest moving stream, which is contrary to findings for fluids with large density differences.