Mystery surrounds the source of pollution which has killed scores of fish in a tributary of the River Ouse.
The alarm was raised at the Bevern Stream in Barcombe on Monday. Attention has been centred on Red Bridge, east of the village.
Environment Agency spokesman Dave Robinson said on Tuesday: “The Environment Agency is responding to a serious environmental incident after we received reports of dead and distressed fish in the Bevern Stream last night.
“We carried out initial investigations yesterday in the fading light which showed some dead fish and low oxygen levels.”
He said Oxyjet equipment had been deployed on Monday night to try to increase the oxygen in the water.
Mr Robinson continued: “Our teams have been on site this morning since 6.30am to continue our investigations and to deploy our own equipment to reduce the impact of the incident.
“We have found up to 100 dead fish and more distressed fish downstream. We have not yet identified the source of the pollution.”
Southern Water was contacted by the Environment Agency following the discovery of the dead and distressed fish in the narrow watercourse.
A spokesperon said: “The company has a treatment works and a sewer near the stream. Our investigation teams went to the site last night and again today but have not found any failures of our works or infrastructure which would have affected the water quality.
“We are working closely with the Environment Agency while the investigation continues.”