A seaside town's regeneration plans have suffered another blow with the threatened loss of a major employer.

The Government's announcement yesterday that the Child Support Agency (CSA) in Hastings would be replaced by a tougher, streamlined organisation is the fourth setback to the town in as many weeks.

The CSA is one of the largest employers in Hastings and St Leonards, employing hundreds of people at Ashdown House. News of the shake-up has fuelled fears that jobs are facing the axe.

It is the latest blow to Hastings and its regeneration plans.

On June 16, Hastings Borough Council closed the pier because of major safety concerns. Legal arguments are continuing but many traders have lost their livelihoods.

In early July, Barclays bank announced that 300 jobs would go from their offices at Breeds Place on Hastings seafront.

Last week regeneration developers Sea Space announced plans for Pelham Crescent were being put on hold for five years because Hastings' economy could not support it.

The series of set-backs has marred plans to boost the economy and transform the run-down seaside resort.

Hastings Borough Council is dismayed by the latest blow and is planning emergency talks with the CSA and MP Michael Foster to limit the damage to the town's economy, reputation and livelihoods.

Councillor Matthew Lock, lead member for regeneration and planning, said: "This is potentially devastating news for the local economy, the third major announcement of possible job losses in six weeks.

"Hastings is working hard to regenerate and this is clearly a serious blow. We cannot be allowed to degenerate.

"I am writing to Michael Foster, inviting him to meet myself and colleagues to see how we can work together for the people of Hastings.

"If the CSA decision is final, and I suspect it is, we must do all we can to ensure the needs of our town are properly met. In particular, I will be asking if it is possible for the new body which will replace the CSA to be based here. I will also be pressing for other government departments to be moved to Hastings.

"The Government has recognised we have major challenges. We must now all pull together to ensure the very good work carried out over the past few years is not wasted. Indeed, the need for action has never been greater."

A spokesman for the Public and Commercial Services Union said: "There is no indication yet what form the new body will take or the impact on jobs."

Mark Serwotka, general-secretary of the union, said: "It is difficult to see how things can improve in the short term, with a restated commitment to cut a third of CSA staff in the run up to the creation of the new organisation only adding to the backlogs and frustration of the public.

"The proposals do little for staff morale, fuelling fears of more job cuts, outsourcing and privatisation, which would lead to a poorer and more fragmented service and do little to restore the confidence of the public."

A spokeswoman for the Department for Work and Pensions said: "As details are determined the people involved will be informed. Changes will not happen overnight as it is a huge organisation."