ENVIRONMENT Secretary Owen Paterson has derided reports that the Government was struggling to secure a new deal with flood insurers for vulnerable homes as “complete nonsense”.

It was claimed yesterday that hundreds of thousands of homes may be left without flood cover due to a row between ministers and the insurance industry over how future flooding bills would be covered.

The Association of British Insurers (ABI) had claimed that talks about a “safety net”

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deal to ensure those in floodrisk areas can continue to afford their policies were at “crisis point”.

But last night, Mr Paterson said talks were ongoing – and that ministers were committed to securing a good deal for both householders and the taxpayer.

The Environment Secretary was speaking as he updated MPs on a flooding crisis which has hit homes across England and Wales, leaving three dead and more than 900 homes evacuated.

Speaking in the Commons, he said that more heavy rain was expected and it was too soon to quantify the full scale of the damage.

Pressed to comment on the row with insurers by his Labour shadow Mary Creagh, Mr Paterson said: “Today’s story is complete nonsense.

There was a senior level meeting as recently as the end of last week. I’m looking forward to receiving the ABI’s latest suggestions.”

Mr Paterson said it was Labour who left office in 2010 without laying any groundwork for a replacement to the statement of principles – an agreement between the Government and insurers to ensure householders at flood risk can get insurance.

Ms Creagh told MPs that if Chancellor George Osborne could not announce a deal in next month’s Autumn Statement, householders would find it impossible to get insurance for their homes.

Insurers want to top-slice all insurance premiums to create a new funding pot to cover flooding claims.

But while that is being built up, they want the Government to step in to provide a temporary overdraft to cover any shortfall during intense periods of flooding.

Over the weekend, a 21- year-old woman was killed and two people were seriously injured in Exeter when they were crushed by a tree as winds whipped southern England, and a 50-year-old man died after falling into a canal in Watford.

It followed the death on Thursday of a man who was killed when his car became wedged under a bridge near a ford in Rectory Fields, Chew Stoke, Somerset.

In his statement to MPs, Mr Paterson said: “The whole House would wish to express its profound sympathy to the families and friends of those who lost loved ones at this time.”

Forecasters warned of more trouble ahead as a band of persistent rain moves across northern England and North Wales, with County Durham, Teesside, North Yorkshire and the Conwy area of North Wales likely to be worst affected.

Heavy showers are also forecast in Wiltshire, Dorset and central southern England, while gale-force winds are likely to hit the northern coast of Cornwall, the north east coast of England and parts of Wales.

The Environment Agency is predicting river levels to swell with the River Severn being of particular concern.

The River Severn, in Tewkesbury, is expected to peak at 4.8m – a metre less than the 2007 level.

Mr Paterson said more than 900 properties had been flooded, including up to 500 in the South-West alone.

Road and rail networks were also affected.