It has taken more than 40 years to reach a decision on possibly the most hotly-contested transport scheme in Sussex.

Transport Secretary Stephen Byers yesterday rejected the multi-million pound western and eastern Hastings and Bexhill bypass schemes for environmental reasons.

The green lobby was delighted but many businesses, councils, residents and politicians were furious.

They believed the £240 million scheme was the answer to the problems which rated Hastings only 27th from bottom in the UK's deprivation index.

Hastings and Rye's Labour MP, Michael Foster, immediately called for a debate on the issue, saying a mistake had been made.

He told Leader of the Commons Robin Cook: "My electors are now devastated by the decision not to proceed with the bypasses, despite the local council being unanimous, the county council being unanimous and the South-East region being unanimous."

Mr Cook replied: "The Hastings bypass has been a matter of contention. The expression of public opinion did not point all in one direction.

"I regret the outcome disappoints you but it is often difficult to please both parties."

Tory councillor Peter Jones, leader of East Sussex County Council, said it was a "kick in the teeth" for Hastings and Bexhill by a Government which had pandered to "eco-tyrants".

He added: "This is a triumph for the eco-terrorists and shows that the Government has caved in to a small but extremely vocal minority on an issue of fundamental importance.

"This decision flies in the face of overwhelming public opinion and undermines the regeneration of an area sorely in need of it.

"Our county desperately needs both the western and eastern bypasses. East Sussex is the poorest county in the South-East, with Hastings its poorest town."

Dejected council bosses in the resort have now called for ministers to visit Hastings to ask how much of the £120 million earmarked for the bypasses would be seen in Hastings now that the plans have been scrapped.

Labour's Hastings Borough Council leader Jeremy Birch said: "Hastings and St Leonards is the most deprived local authority area in the South-East and the Government has a responsibility to the borough.

"We want to know how much money the Government is going to offer to us to improve bus services and public transport around the town and other measures that can tackle the congestion on local roads.

"We also want to know how much money the Government is going to give us to help develop all those sites that we have identified for possible housing and employment purposes.

"It's not enough for the Government to say 'no' to the bypass unless it offers substantial investment to revive our town."

A decision in favour of the bypasses was likely to have triggered Newbury-style protests and a legal challenge from green groups who said the go-ahead would have conflicted strongly with the Government's pledge to avoid building major new roads on sensitive sites unless there was overwhelming interest.

But supporters argued the bypasses and improved rail links would, together with a new business park at Bexhill, deliver 4,000 new jobs in an area containing some of the worst deprivation in the South-East.

Business support group 1066 Enterprise argued that millions of pounds had already been poured into the area, yet without improvements to the transport infrastructure it would never recover.

John Cosson, chairman of Hastings and Bexhill Integrated Transport Partnership, said: "I am utterly appalled by the decision. Perhaps it is now time we did something radical.

"The Government knows there would have been people digging tunnels and living up trees had the bypasses got the go ahead. Perhaps the people living on the A259 Bexhill Road should continually use the pedestrian crossings to make their point."

"Stephen Byers must be called on to spell out his plan to regenerate the area without the bypasses."

Business leaders accused the Government of ignoring the needs of the local economy, saying any hope of prosperity for the area was now impossible to achieve Ken Caldwell, chief executive of Sussex Enterprise, said: "Businesses all along the South Coast and especially in Hastings will be bitterly disappointed with this news.

"Just over a month ago all the main party's General Election candidates in Hastings backed the bypasses. The anti-bypass candidates received less than two per cent of the vote.

"The roads are an integral part of a whole package of transport measures that are needed for the area.

Transport minister John Spellar attempted to soften the blow by favouring other parts of the consultants' study, including asking the Strategic Rail Authority to work with councils on plans for a new station at Glyne Gap and for an Ore/Bexhill metro rail service.

He announced that rail operator Govia had agreed to the electrification of the Ashford to Hastings route and to study further improvements.

Mr Spellar added: "I am also inviting East Sussex County Council to come forward with well thought out proposals for improving bus services in Hastings.

"Regeneration is an important priority for the Government. Some wards in Hastings suffer from some of the most severe deprivation in England.

"It is important that we have a strategy to tackle this and we stand ready to help but we do not believe the bypasses are the solution."

The Hastings eastern bypass and the Bexhill and Hastings western bypass were first proposed in the mid-Eighties before going to a public inquiry in 1996.

The inspector recommended that both be built but the Tory government stalled on making a final decision, leaving the schemes in limbo until 1998.

At that time the then environment secretary John Prescott referred the problems of access to Hastings to the Multi-Modal Study, a new approach looking at transport problems and solutions.

The final 300-page report, published in December 2000, put forward two alternatives.

Common to both was a package of public transport improvements, including improved train services to London, electrifying the line to Ashford, a much-improved service along the coast between Bexhill and Hastings, quality bus partnerships in both Hastings and Bexhill, improvements to the A21 between Hastings and the M25 and limited parking restraint.

The difference between the two alternatives was the two bypasses.

The study consultants were unable to make a clear recommendation on a preferred option, saying a decision had to be taken by politicians as the £240 million "with bypasses" option contravened Government policy on the environment.

The report was considered in February by the South-East Regional Assembly, which recommended the option including the bypasses to the Government.

Yesterday Mr Byers said the consultants' report did not set out a convincing regeneration case for the roads, which, although they could have possibly helped create jobs, would not necessarily have helped those most in need.

Mr Spellar said the supporters' arguments were weakened because the roads would have impinged heavily on some of the finest landscapes in the South-East.

Brenda Pollack, Friends of the Earth's regional campaigns co-ordinator, said: "The Government has finally listened and we feel vindicated by this decision.

"It is a victory for common sense and at last shows the Government's commitment to the environment.

"We are not just about birds and bees but about people's quality of life which would have been at risk had the bypass decision gone the other way."