A £1 million long-term solution is being sought to help ensure there is no repeat of the recent flooding crisis.
The Government has been asked for the funding to build up to four permanent reservoirs to last several decades.
Two of the permanent reservoirs could be built near Woldingham, with the others likely to be nearer Kenley.
It follows last month's installation of four temporary reservoirs in Woldingham, to prevent Caterham Bourne from flooding the Kenley waterworks which serves thousands of nearby homes and businesses.
The reservoirs slowed and diverted enough water so the A22 between Whyteleafe Hill and the waterworks re-opened on March 10.
The cash bid has been jointly lodged by Croydon Council and Surrey County Council, with the support of Tandridge District Council.
Tandridge council spokeswoman Giuseppina Valenza said: "We are working closely with both councils on plans to deal with future flooding issues."
Croydon Council leader Mike Fisher said: "There are some residents and businesses still counting the cost of damage to property and loss of trade.
"However, the situation would have been far worse if the waterworks had failed.
"Permanent solutions have to be our next priority."
How they finally brought the floodwater under control – turn to pages 22 and 23