Residents and business owners last night demanded Southern Water foots the bill for failing to protect them against a flood.

They want compensation for the hundreds of thousands of pounds damage caused to homes, firms and cars by 4ft of floodwater in Hastings.

Pratibha Paleja, 49, who runs the Smokemart Cutprice newsagent, said: "I don't want to claim on my own insurance because my premiums will shoot up. I want Southern Water to pay."

Up to 40 businesses and about a dozen homes were flooded as water surged through the town centre on Monday morning following a torrential overnight downpour.

It was first thought the failure of a £43 million storm tunnel built by Southern Water in 2000 to stop flooding was to blame for the devastation.

But yesterday the company said it believed there was a mechanical failure at its Coombes pumping station.

Pumps are understood to have failed to operate at the station, which is a huge underground labyrinth of pumps, pipes and other machinery housed on three levels in a 115ft-deep shaft.

Four large pumps are able to send 220 gallons of stormwater every second from the tunnel.

An inquiry was under way into why the pumps are believed to have failed. In the meantime, the pumping station is being controlled manually round the clock by Southern Water operators.

Southern Water said: "Engineers are currently on site carrying out further investigative work into how and why this happened."