Environment Minister Elliot Morley has exclusively revealed to MRW that the Government will overhaul the fining system for environmental crimes such as fly-tipping and the illegal recycling of cars.
The penalties handed out by magistrates were criticised in a recent Treasury report that found it was often in a company's interest to pay the fine, rather than spend time and money complying with law.
Philip Hampton's report, Reducing Administrative Burdens , said: "If penalties do not reflect the advantage gained by a company breaking the law, dishonest businesses are given further incentive to breach regulations and undercut honest companies."
The Environment Minister's admission to MRW seems to represent a shifting of the Government's focus on how it handles environmental crime and recognition of the importance of the issues raised by the Hampton report.
Morley said: "We recognise that the Environment Agency (EA) spends time and money bringing these cases to court and too often the fines haven't reflected the financial gain of the offenders.
"The proper disposal of waste is potentially very expensive, and the potential saving of those that dump illegally must be reflected in the fines."
The lack of parity between the cost of compliance with European legislation and the penalties for those that fail to has been particularly evident in the industry with the longest history of recycling - the scrap metal trade.
In November 2003, regulations were introduced to ensure that old vehicles were scrapped and their constituent parts recycled with minimum impact on the environment.
To continue recycling old bangers and comply with the End-of-Life Vehicles (ELV) directive, scrap metal dealers had to concrete their yards so that vehicles were stored on a non-permeable surface.
They also had to invest in expensive vehicle depollution equipment to remove all hazardous substances from cars, such as battery fluid and oil, before their metal can be recycled.
If the scrap dealers did all this they could register with the EA to become an approved treatment facility (ATF).
However, across the country ATFs have complained of cowboy scrap merchants undercutting them by illegally recycling vehicles on muddy non-concreted yards, removing pollutants with nothing more than an axe.
WH Orchards, an approved ATF in Cornwall, has invested £50,000 on the necessary equipment to be in line with the law, but company director Graham Orchards said there was no deterrent for firms that failed to do this.
The Hampton report singled out one horrific example of the mockery that magistrates' fines made of environmental regulations.
It told of a waste firm that dumped thousands of tonnes of illegal waste over a 10-year period but was fined just £840 on conviction.
A paltry sum when considering the hundreds of thousands of pounds the company would have saved through avoiding landfill tax and gate fees.
As a result of Hampton's findings, the Government is looking at a number of measures that i