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Local householders could be missing a chance to share in the results of huge profits generated by the soaring value of recyclable domestic rubbish it is claimed.

Local authorities such as Kent County Council admit that they could make up to £1 million a year by selling recyclable materials if a 25-year deal with recyclers could be renegotiated writes The Times.

This year alone the rising cost of oil, which is used to make plastic, has forced prices of domestic rubbish even higher. The sale price of mixed plastic bottles has nearly tripled to £230 a tonne in the past six months. Six years ago it was £10 per tonne.

With plastic processing advances in coming months, yoghurt pots, bags, food packaging and any plastic containers will be even more sought after as manufacturers recycle plastic to avoid buying oil.

Newspapers and cardboard now sell for £100 a tonne, double what they were fetching early last year. Metal from cans was £80 a tonne at the start of 2007 and has risen to £200. A tonne of copper now sells for more than £3,000, compared with a tenth of that in 2002.

The sharply rising prices give councils an added incentive to boost recycling, but the fixed-term deals negotiated by many authorities, set at the prices of recyclable materials several years ago, allow the contractor to reap the reward.

A waste disposal deal that a decade ago looked like good business is now regarded by Kent County Council as a costly mistake.

“At the time it looked a good deal,  ten years later I would say never again,” said Keith Ferrin, the council’s cabinet member for environmental and waste services. “If I could get out of the long-term contract I have inherited I would do that.”

Under the agreement the private company was to incinerate 320,000 tonnes of waste annually, using a facility that has yet to be opened, but much of the rubbish is now too valuable to burn. Mr Ferrin said that recycling had changed so dramatically that plastic that the council formerly paid to have removed now has businesses clamouring to buy it.

“Over the course of a year we could make just under £1 million profit.”

Prices of recycled materials have risen so sharply that less than halfway into the 25-year deal the council is attempting to renegotiate with the contractor.

The Times reports that Town hall leaders have said that the sector is missing out on millions of pounds that would come from trading commodities themselves or negotiating better contracts. They said that such profits could go to improving local services and even cutting bills.

Such is the concern over the complicated waste contracts that the Audit Commission is looking at the length and cost of the deals as well as the financial risks. The value of raw materials and the inequity of council returns are being examined as part of the inquiry. It reports next month.

A Shepway Council spokesperson confirmed that the district council does earn money from the sale of recycled plastic, cardboard and paper but this goes towards the cost of their existing environmental services.

"It costs money for the materials to be collected, so the selling of the materials helps to pay for this.

"It should also be noted that 85% of waste in the area is generated from the commercial sector and this is dealt with by individual businesses. The council only deals with domestic waste," they explained.