A lack of quality business premises is hitting the Sussex economy.

Sussex Enterprise found 15 per cent of businesses suffered from inadequate premises and this constrained development and productivity.

Economic researcher Joe Clease said: "We forecast a shortage of up to 560,000sqm of office and industrial space could develop in Sussex by 2010.

"This would be devastating as companies would be forced to either relocate outside Sussex or hold back expansion.

"This will inhibit the growth potential for Sussex and result in problems creating high-quality jobs and high value-added businesses.

"We need to address the causes of the lack of investment in premises: Poor infrastructure, a lack of developable sites and an irresponsiveness in the planning process."

Demand for premises in Brighton and Hove is beginning to spill over into Eastbourne, Lewes, Burgess Hill and Crawley.

The increasing take up of sites in these towns will soon restrict the space left to expand.

Crawley is the only town with enough space to cope with demand.

But most companies on the coast will be unwilling to relocate to Crawley as they need to be close to staff and markets.

Mr Clease added: "Unless the imbalance is redressed, Brighton and Hove and East Sussex will be in danger of becoming second-class locations."

Sussex Enterprise is calling for a package of measures, including:

Improved transport and broadband infrastructure
Fewer tiers of planning authorities
Local plans which can be adapted more easily
Greater business engagement in plan preparation
Improved integration with regional strategies
A flexible leasing regime to encourage the market to become more responsive to the needs of growing businesses