Major flood defence projects in Lewes and Chichester face cutbacks after the Environment Agency failed to secure the cash it says it needs.

Lewes MP Norman Baker described the Sussex Flood Defence Committee's decision as "madness".

The committee - made up of councillors and Government appointees - turned down the agency's request for £10.3 million, a 15 per cent rise on last year's funding.

Instead the agency will get £9.8 million, a ten per cent increase. The committee said local councils could not afford what the Environment Agency wanted.

Peter Midgley, the agency's Sussex area manager, said: "While I am grateful that the committee agreed with my statement on Sussex flood defence needs, I am naturally disappointed that the committee could not raise the funding for all the work that I would like to undertake in the coming 12 months.

"As with everyone else, I must work within my budget and from the funding I will provide the best possible standard of flood warning and defence that I can for the people of Sussex."

But East Sussex county councillor Roger Thomas, who sits on the committee, said: "No other budget in East Sussex will be getting a ten per cent increase."

He said the agency was scaremongering with pleas it would not be able to carry out some of the flood defence work.

Committee colleague and Brighton and Hove councillor Jeane Lepper said: "We are paying money into a levy for flood defence systems for the whole of Sussex.

"None of that money is spent in Brighton and Hove but this year we have had to spend a considerable amount - a six figure sum and rising - for our own flood defences over and above what we pay the Environment Agency."

The flood defence committee has now requested agency staff to prepare a work programme to meet the £9.8 million figure.

But the agency says this will almost certainly mean cutbacks in work on new major construction projects such as Lewes and Chichester.

Lewes MP Norman Baker said: "This is complete madness. This is extremely disappointing and worrying news for the people of Lewes. It sums up the Government's warm words of dealing with the floods have frozen at the first opportunity."

Mr Baker said he would discuss the news when he debated the town's flood problems in the House of Commons on Monday.