A MAJOR clean-up operation was under way last night as the Environment Agency declared that £200m a year needed to be spent on flood defences.

Traders and homeowners across the region breathed a sigh of relief as the threat of serious flooding from earlier in the week appeared to be lifted.

In York, water levels on the River Ouse were gradually dropping after peaking at just over 13ft above normal on Tuesday.

Twelve properties in the city centre were flooded, but the problems were nowhere near on the same scale as the devastating floods of 2000, when the Ouse hit 17ft 7in above its normal level.

Derek Binns, landlord of the Low-ther pub, said water had got into cellars, but not into the main building. Residents had been using their own sandbags and pumps to prevent any potential damage. Mr Binns said: "We just about kept it out."

The Jorvik Medical Practice said its surgery in Peckitt Street had escaped unscathed.

Events in York's annual Viking Festival are continuing throughout this week, although traditional longship races planned for the weekend may still be in doubt if waters rise further.

As rivers subsided, the Government announced the launch of a consultation on the best way to fund national flood and coastal defences.

Environment Agency chairman Sir John Harman, who claimed the staggering sum of £200m a year should be spent on defences, said he would welcome any measures which "address the long history of under-funding".

In a strong plea for an end to hold-ups caused by red tape, he said: "The current rules are over-complex, bureaucratic and money is inflexibly ring-fenced."