There was anger when Stephen Byers axed the Hastings bypass - but it may prove to be the best thing to happen to the town in a generation.

Many saw the project as the key to reviving the down-at-heel resort and were outraged by the Transport Secretary's decision.

But scrapping the controversial road scheme could finally mean the end of decades of decay.

Millions of pounds might be about to flow towards Hastings and the surrounding area in the most far-reaching regeneration package the area has seen.

Plans for the town's future are ambitious; one of the companies helping drew up the master plan which revitalised Barcelona.

Hastings Borough Council leader Jeremy Birch said: "If we are talking about following a city like Barcelona, we are aiming high."

He is a passionate advocate for his home town and dates its decline from the mid-Sixties, when Mediterranean package holidays tempted Britons abroad.

He said: "Here was the town in decline and the council sat and watched, had no idea how to change things. It took Hastings decades to realise what was going on."

The years of decline have been brutal. From a genteel Victorian watering hole, its prosperity marked by villas and terraces, Hastings has become the 27th most deprived town in England.

It figures prominently in most of the deprivation league tables. Five council wards are among the top ten per cent of the most deprived in England, six are among the ten per cent with the lowest incomes and five are among the ten per cent with the most child poverty.

The story is much the same when it comes to health, housing, education and unemployment. The jobless rate is running at 5.1 per cent, about double the rest of East Sussex and three times the South-East as a whole.

Spurred by the disappointment of the bypass, politicians, economic development chiefs and business leaders set up the Hastings and Bexhill taskforce and went back to the drawing board.

The Government agreed the taskforce's outline plans and asked for a detailed, costed and timed strategy which will go to regeneration minister Lord Falconer next month.

The bypasses would have cost £120 million, and there will be bitterness if the same amount of money is not devoted to the new package.

The £26 million Hastings has received through the Single Regeneration Budget during the last five years, although welcome, pales in comparison.

The project, which is likely to be spread over ten years, has five key themes:

A university campus at Upper Wilting Farm, initially with about 800 students, later 2,000, to act as a launch pad for new ideas. The Universities of Sussex and Brighton are already interested, as are colleges across the Channel in Rouen and Lille.

High-speed broadband internet links, giving Hastings the potential to become the pilot e-town.

Better and faster roads and, particularly, rail links to the rest of the region.

An enterprise hub, possibly at Worsham Farm, on the edge of Bexhill or in central Hastings, to act as an incubator for small business start-ups. A business park and new housing is also planned at the Worsham Farm site.

Building new homes, mostly on brownfield sites, and improving existing ones, as well as boosting community facilities.

None of the five is self-contained and each will need to be tackled if the rejuvenation is to succeed. Hopes to attract new business, for example, are unlikely to get far unless there are transport improvements.

Fast trains to London today take one-and-three-quarter hours, only three minutes faster than in the Twenties.

The plan's backers also want the A21 made into a dual carriageway and a metro-type train service linking Hastings to Ashford and the Channel Tunnel in the east, and Brighton and Hove in the west.

Not everything is rosy. The Green lobby, which successfully defeated the bypass, has already dubbed the Bexhill relief road, intended to open up the university campus and business park, the son of the western bypass and branded it unacceptable.

Hastings tends to overshadow neighbouring Bexhill, but the rejuvenation is aimed there too.

Bexhill, founded on private schools where the children of colonial soldiers and civil servants sent their children, has never really recovered from the end of the empire.

Malcolm Mitcheson, president of the Bexhill Chamber of Commerce, said: "If it does go through it would be the best thing that has happened in about 50 years."

Among the organisations driving the programme are local councils, the South-East England Development Agency and East Sussex County Council.

County council leader Peter Jones said Stephen Byers had asked them all to come up with "imaginative solutions" when the bypass was abandoned and they had.

He said without the infrastructure new roads might have brought, planners had to create an area where money was made from brains rather than brawn.

Scrapping the bypass could help revive Hastings and Bexhill.

Mr Jones said: "I think the Government was somewhat taken aback by the hostile reception to its decision.

"It realised that it had upset the local community and felt it had to act.

"Hopefully we can succeed by exploiting a political window of opportunity."