Milton Keynes Council and Northamptonshire County Council will be working together to deliver this project, making an important contribution to the UK's landfill directive targets.

By 2020, about 200,000 tonnes of biodegradable waste could be diverted from landfill each year thanks to this funding. Potential net carbon savings, compared to the current arrangements, could reach 83,300 tonnes.

The partnership is aiming for a long-term minimum recycling/composting rate of 55 per cent by 2020 - 5 per cent above the national target.

Environment Minister Jane Kennedy, said:

"I can today announce the formal approval of Milton Keynes Council and Northamptonshire County Council's bid for £138 million PFI credits to deliver new waste management infrastructures in their areas.

"This will create a real incentive for both the authorities and industry to work together to reduce waste and make better use of the waste that is produced, as well as reducing our impact on the environment."