?Insurers have rejected calls from the Environment Agency (EA) to withdraw flood cover in order to deter housing development on flood plains.

Baroness Young, chief executive of the Environment Agency, this week said insurers should refuse cover as a deterrent to developers who plan to build on flood plains, against the EA’s advice.

But her comments angered insurers and brokers who maintained it was role of the state, not insurers to manage flood risk.

Bill Gloyn, chairman of European Real Estate at Aon, said: “Shifting the responsibility on to insurance companies to be the final arbiters of building development is an incredible suggestion. This is merely a smokescreen to hide decades of government under-investment in flood defences.”

Alan Gairns, property development manager at Royal & SunAlliance, said: “Our expectation was that Policy Planning Statement 25, which makes the EA a statutory consultee for all planning applications, would provide the teeth to limit building on flood plains.”

The government had elected to solve the nation’s housing shortage by unveiling plans to build

3 million new homes, many on flood plains.

Gloyn said that in the absence of adequate insurance against flooding, the government would be obliged to create an insurance pool – another suggestion at odds with the interests of both insurers and the state.

In a related development, the insurance industry is set to be quizzed as part of an independent inquiry into the summer floods, headed by Sir Michael Pitt.

Insurers plan to use the opportunity to echo calls for the government to tackle the problem of inadequate drainage.

It also wants it to lay out a definitive timetable for increases in flood defence spending – currently slated to reach £800m by 2011.

This follows the release of a report by the National Audit Office in July stating that 63% of flood defences in England and Wales were poorly maintained.