The Treasury will cover the cost of council tax rebates for flooding victims in England, David Cameron announced as he warned that recovering from the crisis would be a "very long haul".
Some local authorities have announced plans to exempt residents forced out of their homes from part or all of the bill.
The Prime Minister said councils which make the move will not lose out.
He tweeted: "I can confirm we will fund councils that give council tax rebates to people whose homes have been flooded."
A £4 million fund will be made available to councils to cover the bill for giving residents a rebate while they are out of their homes but it will be up to local authorities to decide how the scheme would work.
Councils will not be forced to introduce the payment exemptions, but a No 10 source said the "funding is there so there is no reason why it should not be taken".
They added: "We are sure councils will be very eager to do all they can."
The funding pot is open to English councils and comes alongside business rate relief for flood-hit communities.
Mr Cameron, who has expressed concern that councils had initially been reluctant to call in the Army, said: "I think you sometimes get a nervousness about who will pay for this, and a nervousness about admitting that you can't deal with this without military assistance.
"But, when you have something as big as this, what you need is a vast national effort, co-ordinated as it has been from the centre through the Cobra emergency committee and drawing on every single thing that you've got: whether that's money, whether that's military, whether that's pumping, whether it's enhancing the emergency services, everything that can be done needs to be done."
In a further indication of the ongoing disruption caused by the severe weather, Network Rail said the storm-damaged main line at Dawlish is not likely to be completely repaired until mid-April.
Originally, Network Rail said the stretch of line - an important link between London and the far South West of England - would not be repaired before March 18.
Some 84 flood warnings remained in place across England and Wales alongside the two severe flood warnings - meaning there is a danger to life - on the Somerset Levels.
A Local Government Association spokesman said: "Many people contending with flood damage to their homes have already been offered council tax rebates by their local authorities.
"Council budgets are stretched and demand for support is high, so it is good news that Government will be supporting local authorities' efforts to provide financial support to flood-hit homes.
"Local authorities are keen to work with Government to ensure the application process is straightforward and that the benefit quickly gets to where it is most needed."