A Labour think-tank has come out firmly against the idea of extra charges for rubbish collection, amid signs that the Prime Minister is preparing to drop the scheme.

The New Local Government Network, chaired by Chris Leslie, Gordon Brown’s campaign co-ordinator, says that the proposal to charge those putting out too much rubbish, while giving rebates to those who recycle more, will not work.

In May, before Mr Brown became Prime Minister, David Miliband, who was then Environment Secretary, published a consultation paper proposing the carrot-and-stick scheme.

The paper followed a suggestion by Sir Michael Lyons to allow councils to charge for rubbish collection.

But Mr Brown has now made it known that he opposes the idea and informed sources say that he will either water it down or drop it.

He is said to be against giving town halls the power to raise money through charges and recognises that a bin tax could be political suicide.

The Local Government Association is also said to be going cold on the idea since the appointment of its new chairman, Sir Simon Milton.

The New Local Government Network argues in its report that introducing charging is unlikely to change behaviour and increase recycling.

It argues that individual households will achieve only a small reward – less than £30 a year – for reducing the amount of nonrecyclable waste they throw out, which would not be enough to alter their behaviour.

The pamphlet suggests instead that councils should set up targets to reduce waste locally, with neighbourhoods pitted against each other and rewarded if their overall levels of nonrecyclable waste declines.

Residents could then choose to spend the money on projects such as refurbishing a park or improving street lighting or safety measures.

“Consultation is ongoing as to whether some form of charging or incentive-based scheme to encourage recycling will provide a solution,” said Anthony Brand, the report’s author. “Our analysis suggests it will not. If the real aim of any scheme is for the public to recognise the costs of waste disposal and change behaviour, the costs of implementation, enforcement and administration render the incentive too small.”

The report accepts that Britain has one of the worst records for municipal waste sent to landfill, with more than two-thirds of the 30 million tonnes of waste discarded each year being buried. It suggests that councils and their partners should calculate, publish and distribute ward-level recycling rates. Incentives would be given to the wards showing the greatest improvements. “The system would be less resource intensive, simpler to monitor and with fewer unwanted side effects,” the report says.

Mr Brown believes that business should make more effort to reduce nonrecyclable waste through incentives or penalties but he is cautious about extending the principle to councils. “The May local elections suggested that some residents voted against town halls with fortnightly collections to boost recyclable rubbish. Mr Brown would be equally nervous about the effect of bin charges,” one local government source said.

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