Funding for coastal and inland flood defence should be targeted at high risk areas such as Lewes and Uckfield where work is urgently required.

East Sussex County Council leader Peter Jones said vital projects were being delayed because the funding system was outdated and unfair.

Sussex's three main councils this week agreed to increase the money they will hand to the Environment Agency for flood defence work next year by nine per cent.

The agency wanted a 14 per cent increase and said it was the minimum required for the most urgently needed flood defences.

Major flood alleviation work in the Ouse valley could be shelved for one or two years because of the decision, which represents a cash shortfall of £500,000.

Other projects in East and West Sussex also face delays because of the shortage of cash.

Mr Jones said ministers should direct cash towards areas at high risk of further flooding, rather than expect hard up councils to piecemeal-fund dozens of schemes.

He said: "If the Government is serious about providing flood defences, both inland and coastal, then it has to make sure the Environment Agency has got the many millions it needs for these major projects."

The Government gives the agency about three-quarters of the money it needs for flood defences. Main councils are expected to meet the rest of the bill, mainly through a separate set of Government grants.

East Sussex County Council's grant will rise by 5.7 per cent next year, lower than the nine per cent it has agreed to pay the agency.

Brighton and Hove City Council will get a 12.5 per cent increase, more than it is passing over. West Sussex County Council, which wanted to pay the full 14 per cent the agency wanted, will get an 11.8 per cent increase.

The grant formula is based on past spending, a system which means underfunding is carried through in each year's settlement even in high risk areas.

The Department for the Environment, Farming and Rural Affairs intends to begin consulting on an overhaul of the funding system shortly.