Scarborough Council is going to fight the Government after it was told there would be no financial relief to help with the repairs from last month's tidal surge.
The cost of January's surge to the borough is approaching £250,000 and the local authority was hoping to recoup some of the costs from the Government's Bellwin Scheme.
Director Nick Edwards told today's cabinet meeting that under the scheme the council would have to pay approximately £35,000 with the Government picking up the rest of the tab.
However, he said the Government had informed the council that it would not be granting money from the emergency repairs scheme, leaving the cash-strapped authority to possibly pay the entire cost itself.
Mr Edwards said: "These are urgent repairs that we undertook in good faith, as we have to support our communities.
"However, for the Government to turn around and say they will not be opening the Bellwin Scheme in this case, is very unfair.
"We are strapped for cash and it leaves us now having to find more money from the budget to fund these urgent works.
"It also sets a dangerous precedent for the future, what happens if there is another surge in the future? Will the cost be left to us once again?
"We will not be taking this lying down, we will be making representations to the Government and [the borough's two] MPs."
Council leader Derek Bastiman said the Government had indicated that it did not believe the surge represented "a risk to life or limb" and that is why it would not be handing over the cash, as it did following the 2013 surge.
He added: "It was only the planning and action taken by the council and other agencies on the days before and the day of the surge that stopped it from being much worse.
"This is very disappointing."