The three-mile eastern bypass for the East Sussex town was considered an inexpensive way of cutting traffic jams in the town centre and local politicians say it would have made the area more attractive to businesses. But ministers disagreed.
Residents have long complained of fume-filled streets and that the town's roads are continually lined with traffic.
Earlier this month, Michael Foster, the town's Labour MP, submitted a petition calling for road improvements and yesterday he presented ministers with a letter calling for the road scheme to be revived.
"It is not only of vital economic importance but also an environmental necessity," he said.
The local authority has made numerous appeals to get the road network improved. It pointed out: "Poor road communications have long been a problem in East Sussex. There are no motorways and only 20 miles of dual carriageway. Parts of the county are therefore isolated which has contributed to economic decline." Pam Brown, leader of the council's Liberal Democrat group, said the decision was infuriating. The town, she said, had been waiting since 1979 for the relief road.
Ms Brown said: "We are the only seaside town in the country that has its main trunk road running along its sea front.
"If they won't give us a road then give us the money to develop an alternative strategy so that residents and visitors can cross the road to the sea front without taking their lives in their hands."
Sussex Enterprise, which represents local business, said the town had been short-changed. Dr Norman Boyland, chairman of Sussex Enterprise and vice-president of SmithKline Beecham, said: "The announcement will considerably dilute the benefits of more than pounds 100m of government regeneration funding."
Dr Boyland also pointed out that an offer of pounds 400m of improvements funded by the local private train company had recently been turned down by officials in Whitehall. "One must question whether this government is committed to an integrated transport system capable of supporting businesses in the South-east and the regeneration of depressed areas along the south coast."Reuse content