The government has been accused of taking money designed for flood defences in East Sussex and spending it on other projects.
Speaking in the Commons, the Lib Dem MP for Lewes, Norman Baker, said people in the town remained vulnerable six years after it was devastated by floods.
About 800 properties were damaged in 2000, leading to an £80m repair bill.
The Environment Agency said other areas of the UK were of a higher priority and the floods in Lewes were a rare event.
Although one area of Lewes badly affected when the River Ouse burst its banks has had new flood defences, others are still waiting.
Mr Baker asked the treasury minister on Thursday why more was not being spent in Lewes.
Treasury minister John Healey replied: "There are no cuts in Defra's spending limits, there are no cuts in the Environment Agency's capital investment programme on flood risk management."
The devastating floods happened when the River Ouse burst its banks
But speaking to the BBC later, Mr Baker said: "Defra's budget has been squeezed by this Treasury - they've had avian flu to deal with, they've had a fiasco of farm payments... and the argument is with the Treasury."
The Environment Agency said flood defences in Lewes were still on course to be built and had not been affected by budget cuts.
Spokesman Andrew Gilham explained that more than £2m had already been spent on improved flood defences to the Malling Brooks area of the town, which was the worst affected in 2000.
"We've also, through a local levy in the regional flood defence committee, been able to raise another £2m to undertake work to the cliff area.
"That work has currently started in the terms of the initial feasibility and we hope to have the work completed on site in the next two or three years," he added.
In July, more than 2,000 people signed letters to the Chancellor calling for more flood defence funding.