Farmer Mark Peters said the farmland was "probably unique"
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Land which has been farmed since the 1930s in Sussex could be deliberately flooded to create a new reservoir.
Plans to build a reservoir on farm and woods near Ringmer were first put forward in the 1970s and rejected.
But South East Water's 25-year plan said a reservoir was needed to avoid a shortage by 2015 across its region of Kent, Surrey, Sussex, Hants and Berks.
Farmer Mark Peters and forester Mike Cameron said the move would destroy hedgerows and wildlife habitats.
Mr Peters, who would lose 360 of his 500 acres at Plashett Park Farm, said: "It's probably quite a unique site, the way it has been farmed, and with all its hedgerows and ecology.
"It might not be the ideal site. Maybe they should consider some other options."
And his father, Bob Peters, who is chairman of Ringmer Parish Council, said: "There are about 10 miles of hedges that will have to come out, 11 ponds, and two or three small woods. It would be disastrous for the environment."
'Water-stressed' area
Mr Cameron, who lives in a Georgian cottage on the land, said he stood to lose both his livelihood and his home.
"South East Water are losing 63m litres a day in leaks. They hope to get 18m litres a day from this reservoir," he added.
"They would rather build a whole new reservoir and destroy this habitat than repair the leaks they have."
Forester Mike Cameron said he would lose his livelihood and home
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But South East Water's asset director, Paul Seeley, said: "Demand management initiatives such as leakage, metering and water efficiency are still not enough on their own to give us the extra water we will need."
He also said the impact of climate change in the South East would mean longer, drier summers and shorter, wetter winters, and added: "It is imperative we act now."
The company is considering two new reservoirs, one near Ringmer, and the other near Canterbury, in Kent.
The water firm said the South East, classified by the Environment Agency as a "water-stressed" area, relied heavily on underground supplies which relied entirely on winter rainfall.
But it said that with the need to "further protect and improve our environment", it may have to abstract less water from the ground in future.
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