Croydon's flood clean-up bill has been halved after the Government agreed to pay a larger share.
The council had been set to fork out more than £1m of the cost of tackling the emergency that has stricken parts of Kenley and Purley for six weeks.
The Government would previously have been liable for any costs above £1.01m under the Bellwin scheme, which sets levels of emergency financial assistance for local authorities.
But ministers have now lowered that threshold so Croydon Council will only pay £575,000 of the total cost.
Council leader Mike Fisher said the final toll would "certainly exceed" that figure.
He said: "We will be now able to claim back anything beyond £575,000, which is obviously good news for the borough".
The energy and climate change secretary yesterday also pledged the Government would invest in flood defences for Croydon if they were needed.
Speaking on visit to flood-stricken businesses near Sutton and East Surrey Water's treatment works in Godstone Road, Ed Davey said he had asked the company and Croydon Council to draw up a report on potential measures to prevent similar crises in the future.
Mr Davey, who was last week appointed minister for flood recovery in South London, insisted money would not just be preserved for the worst-hit areas of the country and that he could "effectively guarantee" funds for necessary work in Croydon.
He said: "The Prime Minister has made it clear that we need to respond to reasonable investment requests and that is what we will do.
"We need to think long-term about how we make our country more prepared for all types of flooding. It is critical that we are vigilant.
He added: "Croydon has been the worst-hit area in London and I have been impressed by how well everyone - from the water company to the council to firefighters - worked together in response.
"Local knowledge has been key. People knew there was going to be a problem before it happened and that preparation meant homes and businesses were saved."
Principle among the measures being investigated is reverse-flow technology that would enable pipes used to transport water from boreholes to the treatment works could also take water back in the opposite direction.
The Government is also in talks with the Association of British Insurers in a bid to avoid delays in claim payouts, such as were seen following the 2011 riots.
Marilyn Poulton, owner of Westbourne Florists in Godstone Road, said passing trade had been "almost non-existent" since the road shut in early February. But she added she was confident the flooding would never be repeated.
She said: "It has been difficult but we have to think positive. It has been taken seriously and this is not going to be forgotten. This probably can never happened again.
"And it is important to remember we are not the Somerset Levels and we could be much worse off."
Godstone Road is expected to finally reopen next week.
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