Last autumn more than 10,000 homes were affected by flooding, and the institute stresses that economic factors should not overshadow the human impact.

Flood facts

An estimated two million homes are at risk of flooding or coastal erosion Last year's floods caused around £1bn of damage Rainfall last autumn was up 77% The Environment Agency says hundreds of millions must be spent on defences Developers have been urged not to build in vulnerable areas

Speaking on BBC Radio 4's Today programme, Mr Morley acknowledged more money was needed.

He said: "There's no doubt that there is going to have to be a substantatial increase in spending."

The minister also agreed the government's approach to flood protection needed to become "more sophisticated" and extend beyond the basic flood defence infrastructure.

One of the report's authors, Professor George Fleming, told the BBC he believed flood defence work had been "a second class operation" up until last year.

The report says more needs to be done to take into account factors such as climate change, and that computer modelling should be used more to pinpoint areas at risk.

The institution is calling for a single agency to oversee all flood defence operations, and says that health and social costs should also be included in the government's cost benefit analysis.

Work brought forward

Last month, the government announced that work on a series of flood and coastal defence schemes would begin ahead of schedule to protect vulnerable areas.

Environment Minister Elliot Morley said an extra £100m would be used to protect towns and cities after floods caused £1bn of damage last year.

But he warned the government could offer no guarantees against further floods, and has urged insurers to take improved flood defences into account when calculating premiums.