The London Borough of Barnet controversially made recycling compulsory for all its householders last month - with repeat offenders facing £1,000 fines.
Even the Green Party described this as "harsh" and called on local authorities to use incentive schemes rather to meet targets.
But a council offering £200 prizes for recycling households has admitted it will have to turn to fines unless it is allowed to charge for waste collections by weight.
Bristol City Council recycling officer Sean Spencer-Wort said: "Whatever you do to raise awareness and encourage people to recycle, one in four people just is not interested.
"If targets keep increasing we will have to find a way to capture that 25% - and there is a point when we will have to look at compulsory recycling.
"I would prefer to see variable charging as I believe it is a happy medium of the carrot and the stick rolled into one. Householders can take their choice.
"But without the opportunity to charge by weight, we will have to follow Barnet's example."
The Government has steadfastly refused to allow councils to set variable charges for waste collections. Secretary of State for the Environment Margaret Beckett most recently ruled it out last month.