A £17 million bypass has increased traffic and diverted trade away from local businesses, a study has revealed.

Traffic on the Polegate bypass is increasing more quickly than predicted and has generated 28 per cent extra traffic in the three years since it opened, according to the study commissioned by the Campaign to Protect Rural England (CPRE) and the Countryside Agency.

The study said that when the Polegate bypass opened in June 2002 the average number of vehicles during the week was 23,500. But that figure had risen to 30,157 by April by last year - a rate well in excess of the national average.

The study published jointly by the Government agency and CPRE showed that the bypass had been partly successful in relieving congestion on the old A27 through Polegate, where traffic levels have only increased slightly over recent years. But ministers' predictions of improved safety have failed to come to fruition.

The study said a saving of 18 casualties a year was predicted but an increase of eight a year was observed.

The study found that the local economy had benefited by almost £23 million but many traders are unhappy at the reductions in business.

Retailers are pushing for signs on the bypass to encourage motorists to shop in the town.

Paul Beard, 59, who owns Ken's Corner Shop in Polegate said he noticed the effect of the bypass immediately. He said: "The bypass opened at 2pm and from that time onward it was wallop. We noticed the difference in trade straightaway."

Mr Beard, who has traded at the premises for 18 years, also lives above the shop.

He said: "As a resident, the bypass has been an improvement. But as a local businessman it's a disaster. A lot of local businesses have already gone out of business."

The study found that the Cophall roundabout, blamed for tailbacks on the A27, had a "significant impact on the landscape to the north of the town. The scale of the roundabout appears over-engineered for the roads it serves."

Plans for a bypass for Polegate were first discussed by the Department for Transport in 1980. The 2.8km stretch of dual carriageway was promoted as part of the Folkestone to Honiton trunk road that would relieve Polegate from through traffic and encourage regeneration in East Sussex.

But Kathleen Covill, senior policy adviser at the Countryside Agency, said schemes did not get reviewed properly and their justifications changed over time.

She said: "Planning a road takes a long time and sometimes the reasons to build the road change. But people are reluctant to go back to the drawing board. Polegate probably did need a bypass, but probably one more in keeping with its requirements in a rural location."

A Highways Agency spokesman said: "More traffic than envisaged using these roads means there is less traffic on local roads which as a result are safer for people using them."