Controversial plans for waste centres handling 200,000 tonnes of rubbish face the axe after being hit by Government cuts.

Private finance initiative (PFI) credits worth £225m to fund the South London Waste Partnership (SLWP) – which could have seen a modern incinerator come to Kingston – were cut on Wednesday.

Last year council leaders called the £1bn 25-year strategy the biggest and most expensive building project Kingston had ever known.

However, under the Comprehensive Spending Review the Government said it would stop funding for seven schemes in the country in a bid to save £26m a year from 2017 onwards.

It claimed the schemes were no longer needed to meet EU targets to reduce landfill.

However, now councils have been put at risk of finding new sites to dispose of waste. They are currently taxed £48 a tonne, which will increase by £8 a year, and face being hit by an extra £150 penalty for every excess tonne of biodegradable waste sent to landfill.

Councillor Derek Osbourne, leader of Kingston Council, said: “Clearly diverting thousands of tonnes of rubbish from landfill is a sensible thing to do, and we seem at the moment to have lost that opportunity.

“The Government is immediately saving a considerable amount of money in PFI credits worth hundreds of millions of pounds, and at the same time increasing our need for landfill for which they get a tax income.

“I can’t help thinking the Government wins both sides around.

“The PFI credits would have allowed us to support borrowing to pay for new waste plants for the South London Waste Partnership, but we don’t know what the implications are yet.

“What it might mean is that we don’t build any additional facilities. It puts at risk the building of new facilities.”

The centre, which was due to open in 2014, was set to prevent rubbish that could not be recycled or composted being sent to landfill.

The news a £1bn incinerator was set to come to south London, with places in Kingston, Croydon, Sutton and Merton identified as possible sites, caused controversy when it was announced last year.

The centre would have handled radioactive waste, clinical waste and included sludge disposal facilities.

Green Party activists opposed incineration, warning increasing recycling rates could leave the centre with insufficient rubbish to burn and importing waste from elsewhere.

Environmentalist Bernadette Vallely said: “From my perspective I'm very pleased. I’ve been against it from the start. Burning something that’s plastic or can be used again is not a good strategic way to get rid of our waste.

“It was an expensive project and not thought through.”

Paul Deere of Kingston Friends of the Earth said the boroughs should concentrate on longer term solutions to reduce, re-use and recycle waste.

He said: “Where they can get together is negotiating with recycling companies to get better recycling of more types of waste. They should be looking at ways of re-using waste as well, in particular furniture recycling schemes.”

The withdrawal of PFI credits will not affect phase one of the partnership, which saw waste companies Viridor and EWC win three contracts to increase recycling and composting capacity.

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