England's flood defence programme is facing funding cuts that could last until 2011, according to a memo sent by Environment Agency executives to senior staff last month.

The document, understood to have been prompted by demands from the Treasury, says flood defence plans might have to be pared back as the cuts take hold.

The memo, written despite high-level reports warning that Britain’s flood defences are in a parlous state, could prove deeply embarrassing to Gordon Brown’s new government.

It is already facing accusations of political paralysis over ministers’ initial failure to respond to last week’s disastrous floods, which left at least five people dead and thousands with flooded homes.

The memo was prompted by the government’s current comprehensive spending review, overseen by Brown while chancellor. It is not due to be formally published until the autumn but hints of what is in store are already sweeping Whitehall.

“Our planning assumption is that our resource settlement over the next three years will be flat cash in line with our current 2007-08 baseline (a real-time reduction in funding) with any growth limited to capital investment,” said the memo, headed “draft risk management planning guidance”.

It follows the worst summer-time floods to hit the country in recorded history. Besides the dead, at least 600 people were injured. About 3,500 people had to be rescued from swamped homes by emergency services. This weekend hundreds of families were still in temporary accommodation and emergency services were bracing themselves for more torrential rain.

Many believe, however, it is government ministers and local planners who should be bracing themselves for the real aftermath of the floods. They say the disaster is a direct result of the government and councils ignoring years of warnings about the danger of building on flood plains.

Among them are the residents of villages such as Catcliffe near Rotherham, one of South Yorkshire’s worst-affected villages, where John Potter, 54, a former council worker and his girlfriend Linda Pass, 43, a silverware assembler, were this weekend in temporary accommodation.

Potter is furious that when he bought his semidetached home five years ago there were no warnings that it might flood. He said: “We knew of the 2000 floods but there have been flood defence works since then and we were told to be confident when we bought the property.”

Britain has always been prone to flooding. Records kept at the national hydrological monitoring programme at the Centre for Ecology and Hydrology (CEH), show that Britain’s greatest river flood was in 1947, when a warm snap melted thick snow. The resulting floods covered an area 10 times greater than those of last week. Since then floods have hit the country many times, with some of the worst in 2000.

What has changed is the pattern of floods, according to Terry Marsh, who leads the CEH monitoring programme. “Winters are warmer so floods caused by snow melting don’t happen now,” he said. “What is unprecedented is so much rain in summer. Climate change is altering flooding patterns in a big way.”

Perhaps the most important change, however, is a human one. Since 1945, despite the known threat, politicians have allowed a surge of construction in Britain’s flood plains. Over the years there had been repeated warnings of the growing dangers but it was not until 2000 that a scientific group worked out the sheer scale of the risk.

“We presented a report to the then agricultural ministry warning that about 1.7m homes were at risk,” said Professor Paul Samuels, a leading hydrologist and technical director of HR Wallingford, a consultancy.

The Environment Agency has objected to tens of thousands of house-building proposals in recent years, but about 20% have still been approved. Its powers of veto were strengthened in January but it has come far too late according to critics. Among them is Jane Milne, head of property at the Association of British Insurers, who believes that firms might soon be forced to refuse cover to many householders.

Such problems are likely to accelerate largely thanks to John Prescott, the former deputy prime minister. One of his most controversial legacies is the communities plan of 2003, which contains blueprints for another surge of building on flood plains, including plans for 160,000 extra Thames estuary homes.

Such proposals illustrate just how low on the priority list flooding still lies. The government has told the Environment Agency it will accept such developments provided the risk is less than one major flood every century.

It sounds safe, but that was roughly the same as it was for Catcliffe.

By contrast, the Dutch will accept nothing less than a risk of a flood every 10,000 years, a standard enshrined in law.

Even London, home to Britain’s greatest concentration of people and economic assets, only merits protection against a flood risk calculated at once every 2,000 years.

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