  One of the key problems facing superconducting qubits and other Josephson
junction devices is the decohering effects of bi-stable material defects.
Although a variety of phenomenological models exist, the true microscopic
origin of these defects remains elusive. For the first time we show that these
defects may arise from delocalisation of the atomic position of the oxygen in
the oxide forming the Josephson junction barrier. Using a microscopic model, we
compute experimentally observable parameters for phase qubits. Such defects are
charge neutral but have non-zero response to both applied electric field and
strain. This may explain the observed long coherence time of two-level defects
in the presence of charge noise, while still coupling to the junction electric
field and substrate phonons.
