East Riding Council was awarded £1.2m through the Coastal Change Pathfinder fund in 2009, allowing it to help and support dozens of residents, businesses and community groups affected by erosion on the Holderness coast, from demolition costs to finding a new home.
But it has only about £100,000 left and is being called into action again to help residents in Skipsea, whose properties are now in danger of falling into the sea.
Coun Jane Evison, portfolio holder for economy, investment and inequalities, said the authority could not afford to support vulnerable residents on its own.
She said: “That’s my call to Defra (Department for Environment, Food and Rural Affairs) and government, to say we have done a lot of good with the money to manage erosion but it’s just about gone and we need a pot of money to bid for to deal with ongoing issues.
“Defra is offering about £5,000 for demolition but that only covers about half the cost and neither does it help people deal with moving.”
She added: “We are for the first time managing erosion and that’s the way its should be, but we need another pot of money because it’s an issue that’s going to continue.”
But Coun Evison was adamant that the authority would not be offering compensation for the loss of property, and said the Pathfinder funding was never intended for such use.
More than 20 properties in Green Lane in Skipsea are at risk, with a couple becoming perilously close to the edge.
Resident Janet Ellis, 68, has led the calls for compensation and said about 160ft of land had been lost to the sea since she moved into Green Lane 28 years ago.
She said: “It’s their error in the first place for letting my bungalow be built.
“I’m just fighting for my rights. The council spends money on other silly things so surely the council can do what’s right.
“There was 60ft of land in my garden, then a wall, then a road, and then a green area to the edge and now all that’s gone and it’s in my garden.
“It’s a big worry that the council or the Government aren’t looking after us.
“I wrote to David Cameron and asked him to come and look for himself to see how the East Coast is going.
“This is the Queen’s land that’s being lost.”
She added: “I really don’t want to move from here because I love it so much. Where am I going to go?
“I’ve paid for my house and I don’t want to go and live in a flat to pay rent. Why should I? I’ve worked hard all my life.”
But Coun Evison said decisions taken by a previous planning authority were not the responsibility of East Riding Council.
“She will not get compensation, she’s not a special case,” she said.
“We will offer her support and offer to demolish her property for her and support for finding somewhere else to live.
“She thinks that because 30 or 40 years ago they gave her permission to build there there’s an obligation by this council - there certainly isn’t.
“A 30 or 40-year lifetime for the property might have been acceptable, but that was that authority, not this one.
“It was her decision to live there. She decided knowing that she was on a coastline that was eroding.”
She added: “We will offer support and funding to demolish but that’s all.”
A spokeswoman for Defra said: “Local authorities can apply to the Environment Agency for grants up to £6,000 per property to help them cover the costs of demolishing homes at immediate risk of coastal erosion. Any additional funding would need to come from the local authority.”