NATURAL disasters like floods and hurricanes are causing "greater economic loss" than terrorist attacks, according to a North Yorkshire MP.

John Greenway - MP for flood-hit Ryedale - said the Government's action on tackling the effects of climate change was "woefully inadequate", and called for more to be done to defend homes and businesses from flooding.

He also warned that insurers might have to stop providing flood cover unless the Government increased spending on flood defences.

Speaking at a major insurance conference hosted by the Institute of Economic Affairs yesterday, Mr Greenway said: "It's all very well to publish reports about how we urgently need to reverse climate change, but Government action on dealing with the effects of climate change is woefully inadequate."

The MP, who chairs the All Party Insurance And Financial Services Committee, said it was important the Government took action to combat terrorism - but evidence showed natural disasters, such as Hurricane Katrina and the flooding in Britain six years ago, were the cause of greater economic loss.

Mr Greenway said residents in Helmsley, who became all too familiar with the effects of flooding in June 2005, had suffered for its lack of flood defences.

"The budget allocation to the Environment Agency for flood defence work was cut this year just at a time when we need to be investing more," he said.

"The Environment Agency estimates some 570,000 homes are in areas of significant risk, yet we know from our own experience here in North Yorkshire that flash flooding can often affect properties which have been classified as being in medium to low risk areas, such as Helmsley."

Mr Greenway also added that while the insurance market was "resilient and sufficiently capitalised", insurers would be unable to continue providing flood cover indefinitely unless the Government increased its investment in flood defences.

His comments yesterday coincided with the sixth anniversary of the disastrous flooding of autumn 2000, in which 450 homes were inundated in York alone.

Hundreds of homes in the Leeman Road area were saved by embankments protecting them from River Ouse floodwaters, but the Environment Agency said last year it now wanted to strengthen and raise the banks to provide long-term protection in the future as climate change increased the risks.

However, York councillor Andrew Waller recently warned that plans for a feasibility study into the proposed improvements could be jeopardised if the Government cuts funding further.