The government is in "turmoil" over the implementation of rules to prevent housing developments making floods worse, building industry sources say.
A deal has been reached on the long-standing question of how drainage features should be maintained, but the policy remains postponed indefinitely.
One industry source told BBC News civil service cuts had left ministers "incapable" of implementing the policy.
Ministers said reducing the impact of flooding was a key priority.
A deal has been struck between the government, councils and builders in England and Wales which will make councils responsible for maintaining drainage features, such as ponds and grassy areas located to catch water running off roofs.
Councils will be able to bill owners of new homes for maintenance.
The councils argue this is fair as owners of existing homes have to have their run-off water treated by water firms through the sewerage system.
But despite the deal, which has taken four years to achieve, the government has indefinitely postponed plans to introduce the new measures from April to allow time for further talks on details.
A Home Builders Federation spokesman said: "After all the work we have done with the government, we are disappointed about the delay to set up the processes for the adoption of the [drainage systems].
"House builders are seeking certainty over the systems they will be required to install and the processes for having them approved."
All political parties describe the discussions as "extremely sensitive", while some participants have privately described extreme frustration that it is taking so long.
One home building industry spokesman, who wanted to remain anonymous, told the BBC: "The turmoil in the government is totally unbelievable. The cuts at the department are clearly a factor. This policy goes round and round - it needs to be sorted out so we can know what sort of developments to plan."
The Flood Act of 2010 obliges builders to landscape developments so that water from roofs and driveways seeps into open ground, rather than rushing into the water system.
But detailed policy on how the features will be cared for has been paralysed, with £500m worth of spending cuts at the Department for Environment, Food and Rural Affairs (Defra) causing regular reshuffles of staff, and leaving key players unable to agree on how the schemes should be built.
Technical experts say the green drainage measures should generally be cheaper than running the water into the sewers, but house builders want flexibility.
They say if they have to create ponds on all new developments it may put up the cost of housing.
John Stewart, from the Home Builders Federation, told BBC News: "If you are forced to put in a large pond, that means you can't build homes on that, so there is a cost involved."
Builders want to be able to catch run-off water in giant underground tanks.
Technical experts say this is a poor solution compared with surface features, adding that green drainage measures are typically cheaper than carrying water away in a pipe.
Paul Shaffer from Susdrain - the community for sustainable drainage, based at the construction research institute CIRIA - said: "There are much greater benefits if you capture water on the surface.
"It's a simpler solution that's easier to maintain; you get pollutants broken down free of charge by vegetation, you get amenity value that improves people's quality of lives, you help to improve biodiversity, you also get the benefit that in heatwaves the open areas of water help to cool down the surrounding land."
Sustainable drainage features
One scheme I visited in Sheffield takes the run-off water from a housing estate, breaks up the flow through a pile of rocks and allows the water to soak away. A nearby pond designed to hold run-off water hosts ducks, a heron and dragonflies, which local people appreciate.
The row over technical standards and who pays for maintenance has delayed the rules' publication several times, and MPs on the Environment, Food and Rural Affairs Committee have urged ministers to find a solution.
Defra planned to introduce the rules in April, but this week acknowledged the delayed deadline would be put back further.
Observers have also expressed dismay that the disputes are rumbling on.
Richard Ashley, Sheffield University's professor of urban water, said: "It is ridiculous. The government is ideologically in favour of deregulation but it's supposed to be introducing this complicated piece of legislation with a demoralised department with civil servants that keep changing.
"The housebuilders are lobbying furiously behind the scenes."
Local Government Association spokesman Mike Jones told BBC News: "The developers should be able to pay for the works that are needed. They are making very healthy profits."
He added it was "appropriate" that people pay for their drainage.
A Defra spokesman said: "We are committed to introducing sustainable drainage systems (suds) to help reduce the risk of floods from new developments.
"Suds are usually cheaper to maintain than conventional drainage, and we will be consulting soon on how they will be maintained by local authorities."
He denied job losses had contributed to policy delays.
Shadow environment secretary Maria Eagle MP said it was "ridiculous" the matter had been allowed to "drag on for so long".
Meanwhile, the prime minister said on a visit to flood-hit areas in his Oxford constituency that the government was doing everything it could to help people affected by recent floods.
David Cameron also insisted the Environment Agency was "properly resourced" despite departmental cuts.
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