It's not the most obvious site for a battle.

In the heart of Captain Cook country, Staithes has historically been known as a refuge for artists seeking inspiration from the dramatic landscape or a magnet for geologists determined to uncover evidence from the time when dinosaurs roamed the land.

However, in recent years there has been a growing sense of disquiet – and, with the area given the title of Britain's worst beach, a line has now been drawn in the resort's 18 metres of sand, with the Environment Agency on one side and many of Staithes' residents on the other.

The thorn in both their sides is the Good Beach Guide which annually praises Britain's clear blue waters and – unfortunately for Staithes – names and shames those areas which fail to meet the strict standards. No-one disputes the facts, which have seen the area blacklisted 16 years out of the last 20, but no-one can agree what should be done.

Some claim it's simply too costly to carry out the kind of measures needed to put Staithes on a par with its East Coast neighbours, others insist the authorities have been happy to turn a blind eye to its plight and, amid the wranglings, the Environment Agency's Frank de Planta has posed the more philosophical question of exactly how long a stretch of sand needs to be before it constitutes a beach.

"You can trace the problems back to 1976 when the European Commission launched its bathing waters directive," says Mr de Planta. "When the UK submitted a list of 27 or so testing sites, it was told to go back to the drawing board. The list ended up spiralling to 497 sites, of which Staithes was one.

"At 18 metres long, it's about as beachy as my big toe and with so few people using it I would question whether it is a beach at all. To me and many others, its inclusion totally contradicts what the original directive was set up to do, which was to improve the quality of waters where substantial numbers of people bathe."

Suggestions that Staithes is not big or sandy enough to appear in the guide in the first place, have only caused the residents of Staithes to dig in their heels even deeper. Leading from the front has been Timothy Kirkhope who, like many others, fears that while erasing Staithes from the list may ease a few consciences, it won't make the water any cleaner.

"People are happy to hijack Staithes when they want an illustration of how beautiful the Yorkshire coastline is," says the Conservative MEP for Yorkshire and the Humber. "Sadly, at the moment at least, when it comes to doing something to preserve an area of outstanding beauty, we seem to be at the mercy of the bureaucrats.

"I don't think it's helpful to rank beaches according to how many people swim from them and what happens to Staithes will ultimately say a lot about the value we put on our coast.

"No-one wants to take responsibility for what is happening here, but if we are not careful, in a few years' time this picturesque spot will be covered in red tape warning people to keep out."

Accusations of buck passing are nothing new. Some months ago, the Environment Agency presented its report into the problems which claimed that the cost of getting the resort's waters up to standard couldn't be justified. While those who doubt the conclusions are still hoping to prove them wrong, the area faces yet another summer holiday season under scrutiny.

"Over the last 15 years, billions of pounds have been spent on cleaning up Britain's coastline," says Mr de Planta. "We don't have the litter problem we used to and swimmers don't have to dodge sewage, but we have to recognise that Staithes has a unique set of problems.

"The pollution in the water doesn't come from a single source, it can't be traced to a specific pipe – if it could, then something would have been done about it before.

"In Staithes, what we have is a combination of circumstance. Animal waste and run-off from the surrounding agricultural land end up in the sea. Because of the harbour's sea wall, the water ends up circling around and you also have to add in factors which are totally out of our control. If it rains a lot, like it did last year, then, inevitably, more pollutants are washed off the surrounding farms and into the sea.

"We estimate it would cost in the region of £14m to fix the problems at Staithes. Given the number of people who use the beach, it's highly unlikely that the Government would hand over that kind of money in any circumstances, and when you add in the current economic situation, it's unthinkable.

"Our suggestion was to have Staithes dedesignated, but we have had a meeting with residents to explain all this and reached an impasse. There is a feeling that somehow the area is being neglected and they wanted a chance to see if they could petition politicians to make the money available, but the plan is to go back to them in the autumn to see if they have changed their minds."

That may be wishful thinking. According to Mr Kirkhope, it's not a bottomless pit of money which is required, but a little imagination and a can-do attitude.

"The Environment Agency have been very helpful, but I remain to be convinced by the costings they have put on the project," he says. "While I am no engineer, I have taken advice and one solution could be a redesign of the breakwater which was filled in some years. ago.

"Opponents claim this would increase the risk of flooding, but we would need such extreme weather conditions for that to happen that I honestly believe it may be a risk worth taking. It's about striking a balance, but at the moment that's something which no-one wants to talk about.

"What is frustrating is that no-one seems willing to sit round a table and talk about the options. My ambition has always been to set up an action group which would include representatives of the Environment Agency, Scarborough Council, Yorkshire Forward as well as a political input so we can look systematically at any plans.

"Am I confident that it will happen? The honest answer has to be, 'No', but there are enough of us concerned about the future of Staithes that we won't let
the issue go away. Removing Staithes for the list isn't the answer, but is a way of effectively sweeping the problem under the carpet."

The determination of those who want to see Staithes water become a jewel in the Yorkshire coast's crown is not in doubt, but time is running out. In two years time, new regulations will be introduced and those areas which continually fail to make the grade have already been warned that they will be removed from the list whether they like it or not.

"Beaches on the list will be required to let the public know on a daily basis whether they are safe for swimming with the status updated on electronic boards," adds Mr de Planta. "Given Staithes's history, it's not going to make pretty reading and the reality is that if it fails to make the grade after four years, it will be dedesignated anyway.

"To me, it seems crazy to push forward with something which is all but guaranteed to attract bad publicity. Staithes is a fantastic place, but to have people link it to Britain's worst beach obviously has an impact on the area's image and it's tourism."