The European Commission has issued Italy with a final written warning for operating illegal and uncontrolled waste disposal sites across the country.
Unless Italy moves rapidly to close and clean up these sites the EC could take Italy to the European Court of Justice and ask for fines to be imposed.
Italy has also failed to comply with rules regarding the treatment of waste water.
Environment commissioner Stavros Dimas said: Uncontrolled disposal of waste and untreated urban waste water present serious hazards, which is one of the reasons rules have been adopted by the EU to ensure the highest levels of protection for citizens and the environment. I urge the Italian authorities to take swift action to remedy the situation and fully implement EU environmental law.
Under EU law, if the EC issues two warnings and the problem is not fully rectified the EC has the power to fine the country involved.
The ECJ condemned Italy in April 2007 for its persistent failure in adhering to the proper regulations regarding waste sites. Italy received a warning letter in 2008 under Article 228, which applies when a member state has failed to follow an ECJ judgement. Italys response letter further showed large scale problems affecting almost the whole country.
The Italian authorities put site screening in place at some sites, however the EC believes this action is not sufficient to address the situation or resolve the problem in the long-term.
The EC is currently cracking down on problems of illegal and uncontrolled waste disposal in member states.