Householders were handed bottled water after their supply was cut off for the second time in eight months because of a burst main.
Dozens of homes in Seaford were left without water yesterday.
Bottled water and water carriers were sent to Ringmer Road as residents, firms and hotels in the area complained to South East Water that taps were running dry.
People first noted a drop in water pressure on Monday night. When they woke, the flow had reduced to a trickle and eventually stopped.
Officials from South East Water spent the day trying to pinpoint the source of the underground leak.
Houses in the Splash Point area of the town were the next to lose their water as the problem spread.
In September last year it took engineers almost three days to restore supplies following a leak.
Lewes District Councillor Bob Brown, who lives in Ringmer Road, said he and his neighbours were without water from the moment they woke up on Tuesday.
He said: "The problem should have been sorted out when the same thing happened in September.
"I spoke to engineers then and they told me an old cast-iron main had fractured and the water was flowing away in the surrounding shingle which forms the soil base in this area. That's why there is never any surface evidence of a leak.
"I suspect the original main was put in to service the old Esplanade Hotel and the seafront buildings before 1900. Now it is fracturing due to vibrations from the traffic along Ringmer Road.
"It really ought to be replaced rather than just patched up. I will be pushing for a comprehensive review of the town's water supplies.
"There have been serious failures of this and other infrastructure like the drains in the last year."
A spokeswoman for South East Water said: "We are investigating the source of the leak and have a full team of inspectors on site.
"We are distributing bottled water and have sent bowsers to Ringmer Road.
"The leak is not visible on the surface and we are still trying to track the location of this burst main.
"We have got to check a substantial length of esplanade and roads leading off it to try to identify the location.
"This has happened close to the beach so the water main is sitting underneath the road next to the shingle.
"The water is possibly leaking into the chalk, meaning we can't see where it is coming from.
"In the meantime, we are making arrangements for alternative water supplies to those local residents affected.
"We don't know how many people are affected yet, some people have low water pressure and some have no water at all.
"We will have a better idea when people get home from work, if it is still ongoing at that stage.
"The first calls came through at about 6am and the water will be back on as soon as we have established the source of the leak."
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