Unemployment among young people in Hastings could treble in the next two years, it is feared.
Almost one in ten people aged under 25 are currently looking for work in the town, making it one of the highest levels of youth unemployment in England.
A report from an influential think tank said its economic situation may worsen unless many mo
re new jobs are created.
Research institute Centre For Cities (CFC) estimated that 1.18 million young people in the UK will be unemployed by 2011, with almost a third out of work for longer than a year.
CFC said the percentage of young people in Hastings claiming Jobseekers' Allowance in May was 8.29 per cent, up from 5.74 per cent in February last year.
But the town's MP Michael Foster said the figures by Centre for Cities did not take into account the regeneration work currently being undertaken in the town.
He said: "There is so much happening in Hastings at the moment, such as the new college being built, and the increase in joblessness is less here than in comparable areas.
"However one of the problems in this area is the low skills base but what with the new college opening young people will be better equipped to go for available jobs.
"As long as the regeneration continues it will not be quite as stark for young people as the report suggests.
"Over the next three years we will continue to invest here. Around 40 per cent of our employment in Hastings is supported by public investment."
The Government recently unveiled its £1 billion Future Jobs Funding scheme which is aimed at creating 150,000 new jobs between now and 2011 for long-term unemployed young people.
Councillor Peter Pragnell, leader of Hastings Borough Council said the authority was heading a consortium of councils in East Sussex to bid for Future Jobs Funding.
If successful, 100 out of 335 jobs earmarked for East Sussex would be created in Hastings.
He said: "Massive amounts of money are being invested in improving the education in the town.
"This report comes as no surprise to us. It reinforces our argument for continuing all the regeneration and investment that has already gone on, some of which is aimed at tackling youth unemployment."
Cllr Pragnell said the council is working to attract more new businesses into Hastings.
He said: "We know that Hastings is the most deprived town in southern England and we are working with the South East England Development Agency and the Government to get more companies to invest and create more jobs."
