Council chiefs are trying to find new ways of funding a link road between two towns after the government ruled it would not get the immediate go-ahead.
They say the road, between Bexhill and Hastings, is considered "absolutely essential" to the area's future economic development.
East Sussex County Council says it is disappointed that it now has to compete with other road projects for funding.
It says the deferral will delay the scheme for at least a year.
The link road, initially costed at £89m, was not among the schemes that the Department for Transport announced would automatically go ahead following the comprehensive spending review.
'Not just a road'
Instead, it has to compete with other council proposals around the country for a share of the £600m earmarked for new development.
But decisions on those will not be made until the end of 2011.
Council leader Peter Jones said: "While it is positive the road has not been shelved, this does mean a delay of at least a further year.
"This is not just a road. This is about regeneration and prosperity. The link road is an essential part of the comprehensive regeneration strategy for Hastings and Bexhill.
"More than £300m investment has already gone into the area and the link road is absolutely central to its future economic development. It will bring real benefits to residents and businesses, providing access to new business space, creating jobs and helping companies thrive.
"It will also give developers access to much-needed housing development that will help the two towns grow as communities."
Mr Jones said the council would work "constructively and innovatively with government" to secure its approval, and would investigate different ways of funding it.
The DfT says councils will be "challenged to consider the cost, scope and possibility of local funding when bidding" for a share of the £600m.
The Bexhill to Hastings link road was the subject of a planning inquiry in November 2009, shortly after the previous government had agreed provisional funding.
The county council estimated that up to 2,000 jobs could be created by the road.