Wasteful householders could soon be charged between 25p and 50p for every kilo of rubbish they produce.
A second tax for non-recyclable household waste is just one of a range of proposals being considered by Sir Michael Lyons as part of his inquiry into local Government finance.
Currently just one in five families recycle compared with three out of five in Austria, Denmark and the Netherlands, with Environment Secretary David Miliband keen to encourage the practice.
The Local Authority Recycling Advisory Committee (LARAC) has called on several occasions for local authorities to be given the choice to use variable charging in an effort to have a direct impact on waste minimisation and to boost participation levels in recycling schemes.
While it appreciates that not all its members will want to use charging, the organisation believes they should at least have the choice.
LARAC communications officer Joy Blizzard said: “Local authorities are frustrated with having been set statutory targets, but given very limited tools with which to implement and enforce them at the point where it most matters – at household level.
“Direct charging has a direct effect on householder behaviour. After all, we don’t have communal district-wide gas and electricity bills do we?”
Other options being considered include charging for the type of waste bag, deducting money from council tax for greener households and imposing penalties for those who refuse to separate their waste.
While critics are worried that new taxes could encourage neighbours to dump rubbish in each others gardens and provoke increased fly-tipping, Government officials have suggested that it is perhaps the only way to combat the issue of mounting waste.
But others suggest that such a charge could become a stealth tax on families who create more waste than smaller households, while its implementation in blocks of flats would cause problems as residents share communal wheelie bins.