Cheshire West and Chester (CWAC) and Cheshire East Councils had  been on the verge of finalising a deal with their preferred bidder for an £850m joint contract as part of their 25-year waste disposal masterplan. It is believed that the county creates around 180,000 tonnes of waste every year.

However, they were informed last week by the Department for Environment, Food and Rural Affairs (Defra) of their decision to withdraw £100m PFI funding for the huge contract.

CWAC leader Mike Jones said: “I am extremely concerned by this development because after a five-year process, we were so very close to a solution to our household waste disposal problems over the next quarter of a century. During the next few days we will be talking to government, our colleagues in the East and our advisers, in an attempt to clarify the situation and find a solution.”

The leader of Cheshire East Council, Wesley Fitzgerald, added: “We are disappointed by Defra's decision as an awful lot of time and work has gone into this joint project. We had great faith in this scheme, and had already achieved a lot. However, we will be making every effort to talk with key stakeholders to find alternative ways of reducing landfill.”