FILEY has been designated an area of "moderate to high" flood risk where further action can be taken, according to a new draft plan from the Environment Agency.
The consultation document, which covers the Derwent catchment area, identifies the town as being at risk of both tidal flooding and surface water flooding and recommends the development of a surface water management plan
It says: "Very localised intense rainfall causes widespread flooding, most recently during 2007, as a result of drainage systems being overwhelmed by the extreme rainfall amounts.
"The topography of the area channels water down steep gradient hillsides into the town using roads and paths as preferential flow routes towards the coast."
The paper suggests Filey should come under Policy 5, which is applied to areas where the case for further action to reduce flood risk is most compelling, for example, where there are many people at high risk or where changes in the environment have already increased risk.
The report also predicts an increased future risk from climate change with an estimated 20 per cent increase in rainfall.
Last November, residents in Filey supported plans for a town-wide flood alleviation scheme which would involve the creation of an environmentally-friendly "moat" to help channel agricultural run-off away from residential areas.
Filey Flood Working Group chairman Mike Cockerill said the submission of the plans for government funding had been delayed due to bad weather holding up ground investigations.
He said: "Everyone knows they will find clay, but they've got to do it to complete the report."
The new report from the Environment Agency acknowledged that surface water maps had been developed which could form a basis for a management plan.
Both the flood working group and the town council have endorsed the policy.
Yorkshire Water says it has met the recommendations put forward in the Scarborough Council-commissioned Atkins Report by upgrading sewerage and drainage systems in Wharfedale, the Trees Estate and the Muston Road area.
However, the company remains committed to working with other agencies to make further improvements where needed.