Communities in Wales have no legal right to expect sea defences
Many people living in coastal areas of Wales will need to move because of a serious risk of flooding brought about by climate change, a report has warned.
The report by the Auditor General for Wales Jeremy Colman suggests homes will have to be abandoned.
He said a "drastic re-think" was needed to the current approach to managing the sea's impact.
He called for "stronger leadership" from the assembly government, who welcomed the report.
Some 600,000 people in Wales live or work in areas at risk of flooding.
The Wales Audit Office (WAO) report looked at the effectiveness of the assembly government's policy on coastal flooding and coastal erosion.
Mr Coleman said: "It is not sustainable to go on building ever higher sea walls everywhere there's a threat.
The report highlighted coastal areas which were seen as 'high risk'
"There needs to be much more intelligent examination, case by case, as to whether better sea defences are needed or where, frankly, it's not worth the effort."
He also highlighted that nowhere in Wales had a legal right to defences against sea flooding.
The WAO report notes that the assembly government considers high-risk areas to include coastline between Kimnel Bay and Llandudno in Conwy, Tywyn in Gwynedd, Aberaeron, Aberystwyth and Borth in Ceredigion; and the Gwent levels near Newport in south east Wales.
"People who live by the sea do so at their own risk and it's very important that they should understand that and the consequences that could follow," Mr Coleman added.
"They are exposed to a risk. They need to consider what they should do in the face of that risk."
He also said poor leadership and a lack of capacity prevent quick progress to introducing an answer to the problem.
By Iolo ap Dafydd, BBC Wales environment correspondent
The stinging rebukes by the Wales Audit Office report include what it says is "insufficient capacity" to develop and implement a response not just by the assembly government but the Environment Agency in Wales and the local councils too. Then it says, they are all guilty of a "fragmented system" which doesn't consider the full social and economic issues of flooding.
This report was a year in the making, and is meant to stand alone, separate from any other assembly flooding initiative. In fact I was told the assembly government has concentrated too much on inland or river flooding and not considered in depth the wild card that is climate change and all its unpredictability. That's why the criticisms in this report have been written in such plain language.
In 2007 the National Trust said there may have to be a need to look at "a managed retreat" approach from some areas near the coast under their authority. That's shorthand that some houses, buildings, farms and even communities will be too expensive to protect and defend against tidal surges and storms. There may be a decision in future to leave them unprotected.
If you are a householder living by the sea and finding it hard to be insured now, that's the kind of language which you may not want to hear.
Last year, Environment Agency Wales estimated the number of properties in Wales at risk of flooding from rivers and the sea at 170,000. That figure is now put at 222,000.
The agency said rising sea levels and increasingly severe and frequent rain storms caused by climate change meant the risk of flooding would increase even further.
Estimates suggest the cost of flood damage in Wales may rise from £70m to £1.4bn over the next 80 years.
Wales has some 260 miles (415km) of man-made sea defences along parts of the coast, worth £750m. The budget for flood and coastal risk management in 2009/2010 is more than £41m.
Mr Coleman said Wales' current flood defences cannot keep pace with climate change.
He said: "There's nothing wrong with the policy itself, but it is not being pursued in a determined manner."
Environment Minister Jane Davidson said she welcomed the report and encouraged politicians at all levels across Wales to read it.
She said: "The report calls for a change in our approach to flooding to a more risk-based approach - this is exactly what we did in June 2007.
"We have long recognised a defence-led approach was unsustainable. We can't stop flooding, but we can attempt to alleviate its impact on out communities."
She said ministers had been working with the UK government to modernise flood and coastal risk management arrangements.