The House Builders Federation said such a step could hamper the government's drive for new homes on brownfield sites. An HBF spokesperson said: "A flood levy will make developments less economical and make a lot of developments less likely to happen, which is hardly a solution to this country's housing crisis.
"It is unrealistic to expect one small industry that already pays for the necessary works on a site-by-site basis to pay for a national problem."
The spokesperson said the government should pay .
The Department for Environment, Food and Rural Affairs said the levy may in addition to more government funds.
A source at the department said: "This is just one of many ideas; no decisions have been made and the bulk of the money will still come from the exchequer. What we are looking at is additional funds. If properties are going to benefit from flood defences, we're asking, should there be a charge to pay for those defences?"