THE final government plug for Oxford's £121m flood alleviation scheme announced yesterday will 'keep the city above water when climate change kicks in'.

Oxford Flood Alliance chairman Peter Rawcliffe also said the long-awaited funding was 'wonderful news' which he had waited years to hear.

Oxford City Council revealed at 10am it had secured the final £4.35m needed for the Environment Agency to dig a three-mile flood diversion channel around the city with the aim of protecting more than 1,200 homes.

Mr Rawcliffe said: "If the funding gap is well and truly plugged then three cheers – we have been waiting for this moment for years.

"It is brilliant to hear another hurdle has been overcome.

"There is an awful lot at stake in this scheme – not just people's home, but the functioning of the city. In decades to come, when climate change kicks in – which it will – we don't want Oxford to be underwater, and that's what this scheme is for."

The city council is using the majority of a £6.09m grant it won from the Government's Housing Infrastructure Fund last week.

The cash was specifically intended to help bring forward the 'Osney Mead Innovation Quarter' – an Oxford University plan to redevelop the West Oxford industrial estate including 600 homes for university students and staff.

The announcement brings to an end a two-years of struggling by the Environment Agency to plug the funding gap.

The Treasury, which gave the scheme outline approval in November, warned that every penny of the £121m would have to be secured before it would allow work to start.

At one point the Environment Agency said that if it could not find the £4.35m the scheme may have to be scrapped.

Agency staff and council partners have spent months trying to persuade local businesses and the universities to help meet the cost but to no avail.

The city council said the £4.35m funding 'ensures that the Oxford Flood Alleviation Scheme can be built' and would also protect the 8.8 hectare Osney Mead Innovation Quarter from flooding, enabling it to be redeveloped.

Oxford City Council's new leader Susan Brown said: "The Oxford Flood Alleviation Scheme will bring huge benefits to householders in West and South Oxford, and to all parts of the business community.

"I am delighted that we have been successful in our application for this final tranche of funding."

The Oxford Flood Alleviation Scheme now has received £55.3m from all partners – Oxford City Council, Oxfordshire Local Enterprise Partnership, Thames Regional Flood and Coastal Committee, Oxfordshire County Council, Thames Water and the University of Oxford – and £65.7m Government funding.

The £121m funding will cover the design and construction costs and maintenance of the scheme for 10 years.

The Environment Agency is intending to submit a the planning application in March, but it also still has to acquire most of the land along the route.

It is expecting to have to use government Compulsory Purchase Orders to buy plots from various landowners at market value.

The EA is planning to submit a full business case to the Treasury later this year, while partners continue to negotiate with businesses for future investment in the scheme.

The main pillar of the flood scheme is to dig a 3.5-mile flood channel around the west of Oxford running from next to Seacourt Park and Ride on Botley Road to join the river Thames near Kennington.

Much of the channel will run along the route of the existing Seacourt Stream.

During heavy rainfall, the channel is designed to divert water away from the city centre and stop the Thames from overflowing.

The Environment Agency says it will reduce the flood risk to 1,200 homes in the city but also allow Botley Road and Abingdon Road to stay open during times of heavy rainfall.

The scheme also includes many smaller flood protection works including a bund, or earth mound, running behind the Four Pillars Hotel on Abingdon Road.