Households to face fines if they fail to use 'slop buckets'
Every family could be forced to keep a slop bucket in their home as part of the drive to increase recycling.
Environment Secretary David Miliband hopes the huge quantities of food waste thrown away could be turned into fuel and fertiliser.
The move is expected to be announced when he unveils a waste strategy.
Such a scheme could pave the way for 'pay-as-you-throw' rubbish taxes, in which people are charged according to the amount of waste they put out.
Councils are already under pressure to switch to fortnightly rubbish collections and bring in compulsory recycling schemes.
Mr Miliband is likely to recommend to town halls that they give homes a sealed container for organic material alongside the bins they already provide to recycle paper, plastic and glass.
This slop bucket would be collected by binmen and diverted to a recycling plant, where it would undergo 'anaerobic digestion'.
Doing this would avoid sending waste to landfill, which is subject to high taxes and, from 2010, penalty fines imposed by the EU.
It would also cut down on the greenhouse gas methane, which escapes from landfill.
However, the anaerobic digestion process is likely to be costly in terms of public subsidy.
It is little used in Britain because the 'biogas' fuel it produces is corrosive in many engines and is suitable mainly for electricity generation. Experts have calculated that the process could meet almost 2 per cent of our electricity demand.
Bulk material also produced by household organic waste can be used as fertiliser but there has been no market for it on farms in Britain.
It is often sent to landfill instead, where it is used as top material to cover buried rubbish.
The plans for recycling food waste are likely to be accompanied by schemes for generating energy from incinerators by burning rubbish that cannot be recycled.
But the introduction of a law allowing town halls to bring in pay-as-you-throw taxes could alarm many families already hit hard by council tax rises over the past ten years.
Council chiefs insist that levies on rubbish will not be used to increase their overall tax take.
However, even if that rule was followed, any scheme to make people pay by the amount of waste they leave out would mean the biggest bills would go to those with the most rubbish - usually families.
At least 30 councils have prepared for rubbish taxes by installing microchips in wheelie bins which can report the weight of rubbish electronically when they are collected.
Labour think-tank, the Institute for Public Policy Research, said pay-as-you-throw taxes should be levied on all rubbish that is not recycled.
But Tory local government spokesman Eric Pickles said: "I fear the poorest households will be hit the hardest. Bin taxes could be deeply harmful to the local environment by causing a surge in fly-tipping and backyard burning.
"This isn't a green tax - it's an excuse to tax more by stealth."
The Environment Department said the waste strategy would "outline proposals for collective action" on limiting rubbish. A spokesman added: "Its aim is also to provide the necessary tools and guidance to ensure local authorities are able to deliver the specific needs of their communities."
