The call from London Councils follows a joint statement by four government departments urging public bodies like hospitals and schools not to seek changes to the way their rubbish is collected to take advantage of the service provided by councils for local residents.

While non-domestic premises should negotiate their own contracts to have their waste collected and disposed of, a loophole in the regulations means that some can save themselves money by leaving it for the local council to collect.

However, this puts an additional financial burden on councils. Last year, the Department for Environment, Food and Rural Affairs (Defra) estimated that it could cost waste authorities across England and Wales up to £32 million extra to deal with the waste from premises like hospitals, schools and prisons.

Under the Landfill Allowance Trading Scheme (LATS) boroughs also have a limited amount of waste they can send to landfill each year. If they need additional space they could end up paying for it – the cost of which is picked up by council tax payers.

The West London Waste Authority alone had to set aside an additional £1 million for the next financial year because of the uncertainty over the impact the loophole may have on their landfill allowances.

Chairman of the Environment Sub Committee of London Councils Transport and Environment Committee (TEC), Councillor Irwin Van Colle, said:

“Common sense has finally prevailed and we now have something like an agreed position for all of us to work from for next year.

“The confusion has already added extra costs to Waste Disposal Authority budgets, which has led to unnecessarily higher costs for the residents of London. It also has potential implications for our Landfill Allowance Trading Scheme allocations, which could have added even more costs in future for Londoners.

“It would have also detrimentally affected boroughs recycling performance targets, and I look forward to the government making the necessary changes to the legislation as soon as possible."