Addressing the flood risk in Southampton is the “existential challenge” facing the city.

Council leaders said delivering an alleviation project was an “urgent issue” but there was still a significant funding gap.

A report to the overview and scrutiny management committee said the River Itchen Flood Alleviation Scheme (RIFAS) was crucial for Southampton’s growth and economic development.

However, rising costs have seen the financial shortfall rise to £52million, with a need to explore “innovative funding opportunities”.

The local authority is considering “regeneration-led solutions”, which could see flood defences integrated with urban developments.

This could unlock economic opportunities, attract investment, support the city’s resilience and enhance place-making potential on the waterside, the report said.

Executive director for growth and prosperity Stephen Haynes told the meeting on March 20 that flood risk was the “critical challenge” in Southampton.

“It is the existential challenge of the city and it has to be built into everything that we are doing,” Mr Haynes said.

“We know how urgent it is but there isn’t an immediate silver bullet solution, so we are trying to do all the planning that we can to ensure that there are the frameworks in place so we can take stuff forward.”

The plans for RIFAS would cover a 3.7-kilometre stretch of the west side of the estuary.

It is needed to reduce the immediate present-day risk of flooding to more than 153 homes and 288 businesses, as well as key road and rail links.

The projected impact of climate change and sea level rise increases the area at risk to more than 1,150 homes and 900 businesses by 2120.

Cllr Sarah Bogle, cabinet member for economic development, said there had been a huge funding gap for some time despite an established partnership with the Environment Agency.

She cited the example of new sea walls at the stalled Chapel Riverside scheme as an example of integrating flood alleviation work into development agreements.

There were “prime” sites at risk of flooding and the council had to find ways to get the money itself to deliver the alleviation project, Cllr Bogle said

Borrowing money through the National Wealth Bank was one option on the table.

Cllr Bogle said: “We haven’t moved that far forward on this issue.

“It is a very urgent issue but we have got to navigate our way through what are best routes in the short to medium term as well.

“We still have some funding. We are progressing with what we can in that scheme, so it is not as if nothing is happening but it is not quite what we need right now.”

Mr Haynes said the city council was not the only local authority dealing with flood alleviation schemes that the Environment Agency was not able to fund.

Asked about the challenge in solving the financial gap, Mr Haynes said: “I have to be very honest and very blunt and say I am ongoingly concerned by it.”

He told the committee the council was being “hugely proactive” in reaching out to government agencies, institutions and investors.