Funding to build a flood defence reservoir costing a total of £6.7m in Lincolnshire has moved a step closer.
The Environment Agency, county council, East Lindsey District Council and Louth Town Council have discussed a construction and maintenance package.
The three larger organisations have formed a partnership to raise money for flood defence work in the county.
Construction work could start upstream of Louth in 2013 with the reservoirs in operation by 2015.
A similar scheme to fund two reservoirs in Horncastle is expected to be finalised in November.
Both towns were badly damaged by floods in summer 2007, with about 200 people forced to leave their homes.
Ian Russell from the Environment Agency said: "We know that these flood storage reservoirs are the solution."