Brighton and Hove is too rich to benefit from a major source of financial aid, the Government has ruled.

Yesterday ministers published their map of areas they believe should be eligible to apply for business grants - under the European Union's "assisted areas" scheme.

As expected, following the release of its draft map in July, Brighton and Hove, Lewes and Adur, part of the programme since 2003, have been struck off.

The Government said Brighton and Hove's economy was "too strong within the EU" to qualify.

A spokesman for the Department of Trade and Industry said: "While there are pockets of deprivation in the South East, notably in some coastal towns, it is considered regional aid is not generally the best way of addressing those issues."

If the map is approved by the European Commission it will mean that, from next January until 2013, Sussex business people seeking help to set up a firm or relocate will have to go elsewhere for support.

The decision came after the European Union ordered ministers to reduce the area of the UK eligible for regional state aid from 30 per cent to 23 per cent.

This was prompted by Britain's strong economic performance and because poorer EU areas, including Estonia, Latvia and Slovenia, are regarded as more in need of economic help.

Brighton and Hove City Council described the Government's decision as a blow to the city's businesses.

Since 2003 firms have benefited from grants worth nearly £2 million to persuade them to invest and expand in the city.

The scheme delivered £1.5 million to Legal and General, £230,000 to Custom Healthcare and £60,000 to Sabre Telecommunications.

A Brighton and Hove City Council spokeswoman said: "We are very disappointed with the final decision. The assisted area grants have helped businesses in the city establish themselves and expand. The loss will come as a blow to Brighton and Hove's business community.

"However, we are a vibrant city with a strong entrepreneurial approach to business and have the skills to maintain our profile as a popular place to do business."

The Government tried to sweeten the pill by announcing a new package of measures open to those areas which would no longer qualify for assistance.

This package, announced by minister for industry and the regions Margaret Hodge, will allow regional development agencies to give grants to small and medium-sized businesses in all areas squeezed off the map from January 2007.