Plans for a £50 million recovery package, including a new university, could boost the area around Hastings after July's bypass blow.

The plan outlines measures aimed at addressing transport and regeneration problems in Hastings and Rother.

It follows Transport Secretary Stephen Byers' rejection in July of plans for a £120 million Hastings and Bexhill bypass.

The decision was attacked by local businesses and politicians, who believed the scheme was the answer to Hastings' social problems.

The town is ranked 27th in the UK deprivation index.

The plan has been drawn up by East Sussex County Council following a Government request to come up with schemes to solve the area's problems.

The council said its plan would cost less than half the amount of the cancelled bypass and, unlike that project, would not entail building on environmentally-sensitive sites.

The plan includes a new relief road from central Bexhill via Sidley to Queensway in Hastings, linking up with the A21, and a new railway station at Wilting Farm, at the point where the new road would cross the Hastings to London line, creating a major transport hub.

Also included are a new university or institute of technology near the station and a business park, possibly at Worsham Farm, Sidley, and a link for Hastings and Rother which would bring faster internet communications for businesses, schools and the proposed university.

The council said the package would benefit towns across East Sussex.

Tory county council leader Peter Jones said: "While improved transport, including the bypasses, would have given us the best chance of regeneration, we have put together a good alternative plan.

"This package represents our core regeneration and recovery plan for the Hastings and Rother area.

"There is cross-party agreement on this package and I believe we can achieve regeneration of the poorest area in the South-East."

Malcolm Mitcheson, president of the Bexhill Chamber of Commerce and vice-president of the Bexhill Regeneration Partnership, said: "It is a massive vote of confidence in Bexhill and 1066 country's future.

"At a stroke, the new deal proposed could reverse 50 years of decline."

Green campaigners, who were outspoken in their opposition to the bypasses, today welcomed the principle of the new approach.

But Friends of the Earth regional campaigns co-ordinator Brenda Pollack said she was worried at the lack of consultation with voluntary groups.

She said: "East Sussex County Council needs to realise it needs to work together with people from the voluntary sector and bring us on board if they are to get it right."

Anthony Dunnett, chief executive of the South-East England Development Agency, said: "We are very excited about the proposals that are being developed by our cross-party taskforce.

"But it is rather too early to go into specific details about individual projects and potential funding.

"However, I am confident that, by working together, we will meet the needs of the local communities."