Hundreds of thousands of homes and business premises in English towns and cities are at risk of flooding because the Environment Agency has failed to maintain flood defences in the highest risk areas.

An investigation into flood protection by the National Audit Office has found that in 54 per cent of high-risk areas there is no guarantee that the defences would stand up to a flood.

In London, less than half of all highest-risk defences are in peak condition and throughout the South of England four in ten homes are at serious risk of flooding.

The picture is worst in the South West, which includes Devon, Cornwall, Dorset and Somerset, where less than one in five defences are up to scratch.

In the North West, in Lancashire, Cheshire and the cities of Liverpool and Manchester, only three in ten defences can offer protection and throughout a swath of the Midlands the figure is four in ten.

Instead of protecting areas of highest population, most protection has been given to rural areas and farmland, the public spending watchdog found.

The watchdog now wants to see a shift in resources away from low-grade farmland over to people, their homes and livelihoods in industrial and economic centres.

Despite concerns raised by the NAO report the agency caused outrage by declining to name specific towns and locations. They do not wish to alarm householders.

It is feared the news of the weak flood defences could affect house values and raise questions over insurance cover.

MPs are now certain to be inundated with complaints, with communities demanding the right to know.

There are a total of 1,328 areas in the high risk category and therefore more than 650 locations across England facing an unknown flood risk.

The House of Commons Public Accounts select committee is demanding an explanation as to why these defences are not in target condition. Edward Leigh, Tory chairman, is particularly concerned about these highest risk areas with weak defences. He said: “We simply cannot say, if there is a flood, whether these defences would stand up.

“Flood defences are critical to the protection of towns, cities and people’s homes. There are significant variations in the amount spent on defences, with only small change going to the North East compared with the Midlands and the Thames.” Besides high risk areas the agency has also failed to meet its target to maintain 63 per cent of England’s overall flood defence systems.

The NAO is particularly concerned that with climate change and the likelihood of more extreme weather conditions many homes will suffer the effects of flooding.

The average insurance pay-out for flooding is £40,000 for home and stress, while inconvenience on families has been estimated at as much as £6,000 per household. The agency received £483 million for flood risk management – a significant increase from the £303 million allocation five years ago.

But it is now seeking an extra £150 million a year from the government, a sum which is being negotiated by David Miliband, the Environment Secretary, as part of the comprehensive spending review.

David Rook, the Environment Agency’s head of flood risk managementsaid: “We are not complacent and we want to get [flood defences] in target condition, but we can never guarantee flood protection because we are dealing with nature.”

He attempted to reassure householders in the highest risk areas and said that even if defences were not in peak condition it did not mean that they would fail.

If householders wished to check their flood-risk status, he said, they could log on to the agency’s website.