Lord Smith, who faced intense criticism over the agency’s response to the extreme weather which hit large areas of Britain over the winter, said a “silver lining” to the storms was increased funding for flood defences.
But he said measures needed to be taken to cope with floods when they hit, including the possible construction of Dutch-style homes which could float above the rising waters.
He said it would be “impractical” to impose a blanket ban on building on floodplains so “innovative” solutions were needed.
In an interview with The House magazine, he said: “We will never be able to say there should be a blanket ban on any building in the floodplain. There’s just so much of the country where that’s an impractical restriction.
“What we need, however, to do is if someone is proposing to build in a floodplain they should be making what they are developing much more resilient against flooding.
“There are some really exciting things that are emerging. There’s a rather wonderful technology in Holland where effectively you allow the house to float. It looks just like an ordinary house but all the connections are flexible and in the event that flooding occurs basically the house just lifts with the water.
“That’s probably quite an extreme example, but it’s that sort of innovative thinking we need to be having more of.”
Lord Smith, who admitted he gets “very nervous when it starts raining heavily”, praised the “astonishing” job done by Environment Secretary Owen Paterson on flood defence.
He added: “Fortunately the silver lining from that terrible experience that the country went through, over the wettest winter period that we’ve ever had, has been that the Government have now put more resources into flood defence.”
Lord Smith said the money meant the Environment Agency is not going to have to make any front line flood staff redundant.
“Before that extra money came in, we would have had to do so,” he said. “But now we don’t have to do so, certainly for that two-year period.”
The former Labour culture secretary’s term as chairman of the Environment Agency ends in July and he has been tipped as one of the frontrunners to replace Lord Patten as the head of the BBC Trust. He said: “I would love to be part of the governance of the BBC, it is a hugely important and wonderful institution. It sometimes gets things wrong, and needs to be nudged back on to the straight and narrow, but it is a wonderful organisation.”
But he added: “I don’t think that’s going to happen.”
He said he believed that the way the BBC was overseen needed to change.