Fears have been raised Wyre Council could lose £1m if a deal with waste firm Global Renewables is not renewed.
Lancashire County Council (LCC) has informed district councils involved in a waste sharing scheme that the policy will come to an end in 2018.
At the moment, the agreement means Wyre Council gets cash from County Hall for sending a portion its recyclable waste to Global Renewables in Thornton, to ease the strain on Lancashire County Council’s own service.
It means Wyre Council will have to take on the responsibility of recycling all its own waste, and the cash from LCC will stop.
Coun Peter Gibson, leader of Wyre Council, has told councillors the changes will see the authority’s revenue reduce by £980,000 – equivalent to losing 15 per cent in funding. He said: “I’m very concerned. It will help the county but, in our case, it hits us really hard.
“Whether this has an effect on recycling, I’m not sure, but we will need to think about how we collect waste.
“Lancashire County Council might think it’s good for them, but it’s a short-sighted policy.”
County Coun David Borrow, deputy leader of LCC, said the county council is still trying to work out a solution.
He added: “This arrangement was originally put in place as a way to share with district councils the costs.
“Government cuts mean we all face an enormous challenge to reduce our budgets.
“I find it hard that Coun Gibson should make this criticism.”