East Sussex county and Lewes district councils said they were "disappointed" that the project was not going ahead.

BBC: Newhaven 'largest water park' plans scrapped

Brighton and Hove City Council, Adur and Lewes district councils and Worthing borough council are working on the "city deal" proposals.

BBC: Greater Brighton 'independence' bid by Sussex councils

Lewes District Council said it had sold the Lewes Road recreation ground to KEHC in June 2012, and that its legal costs had been paid for.

BBC: Newhaven 'largest water park' plans scrapped