A planning application for the first flood defence work since the devastating Lewes floods three years ago is expected to be submitted next month.
The Environment Agency said it would be able to start work in the Malling area, after councils agreed a funding package.
But a £600,000 shortfall in what councils are able to spend on flood defences means the work is now scheduled to start in December, six months later than anticipated.
The Malling scheme, expected to cost between £2 million and £3 million, is the only one of four in central Lewes guaranteed funding.
Peter Midgley, the agency's Sussex area manager, said: "We are obviously disappointed. We wanted to get work done in that quadrant before next winter."
The other three quadrants, around North Street, west of the town centre, and around Cliffe High Street, do not have funding and only the latter is on the Government's list of schemes that should be supported.
Tom Crossett, of pressure group Lewes Flood Action, said the undefended areas would be in danger of renewed floods because only one scheme was being funded.
He said: "This is another kick for Lewes. The planning application is going to be pretty controversial because there is some increase to the flood risk in some other parts of the town."
The Malling scheme is expected to be complete by Easter 2005. The funding package agreed yesterday also includes coastal defence work in Pevensey Bay and between Shoreham and Lancing.
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