Volunteers fighting to save a stretch of Norfolk coast from being claimed by the sea are shocked that new laws could see their main source of funding financially cripple them.

Scratby & California Environment Group (SCEG), whose members campaign to save the beaches and cliffs north of Great Yarmouth from further erosion, must pay £150 for a scrap metal collector licence after Government legislation came into force on Tuesday.

Under the rules, scrap dealers and site operators must apply to their local council for a licence and, in the Great Yarmouth borough, pay £150 for a collector licence or £250 for a site licence.

The Scrap Metal Dealers Act 2013, which will be enforced by the police, it aims to tighten up the industry following an increase in metal theft. Great Yarmouth Borough Council said it had written to all registered dealers ahead of regime change.

But the Scratby environment group, which collects scrap from homes in order to raise funds to keep going, said the law will 'hit them hard'.

Chairman Chris Hogg said: 'Collecting scrap is our main source of income and we are already registered. 'We're not raising huge amounts; we're talking something like £40 a month. Having to pay £150 for a licence will hit us hard.'

When asked if the group - a non-governmental organistion (NGO) rather than a registered charity would be exempt, Cllr Val Pettit, the borough council's cabinet member for environment, said: 'The legislation does not allow councils to make special exemptions for charities and NGOs, or to offer them discounted fees. However, the licence fees in the Great Yarmouth borough are set purposefully low – far lower than many local authorities – so they only cover the running costs of the new regime.'

'The Scrap Metal Dealers Act 2013 is new central Government legislation, and local authorities nationwide have no choice but to implement it.

'The definition of a scrap metal dealer under the act is deliberately quite widely drawn. The council is responsible for enforcing the new regime, however the courts will ultimately decide in each case, whether an individual or organisation needs a licence.'

Warning others to be aware of the changes, GYBC said a law now places a duty on a dealer, site manager, or employees with delegated responsibility to verify the full name and address of anyone they receive scrap metal from, and to keep a record of all scrap metal received or disposed of. It will also be illegal to trade scrap metal in cash.

'This legislation aims to make the industry more accountable and transparent by keeping tabs on what is being traded and by whom. It will create an audit trail which will help to deter crime and ensure reputable traders can compete fairly.

It will also help householders identify who the legitimate traders are, because all dealers issued with one of the new licences from the council will be checked for relevant past convictions, and must also have a waste carriers licence from the Environment Agency. It is illegal to pass waste to someone who is not a licensed waste carrier,' added Mrs Pettit.

Licences must be renewed every three years.

Existing registered dealers will automatically be able to trade without disruption or fear of prosecution from October 1 to 15, but cannot continue after this transitional period if they do not have a licence.

As part of the application process, the applicant will be asked to provide a Basic Disclosure certificate, which will reveal any unspent convictions on the Police National Computer (PNC). Refusing to provide this would be grounds for the council to decline to proceed with the application.

It is an offence to carry on business without obtaining a licence, and anyone convicted can be fined at level five - £5,000 - on the standard scale, which will mean the fine could be unlimited when further changes in the law come into force later this year.