Councils could save up to £35million a year if a deposit and refund scheme for plastic bottles and drinks cans is adopted.
The figure comes from a study across eight local authorities designed to measure the impact of such a scheme.
Currently, householders put some of their bottles and aluminium cans out each week to be collected by council bin men.
Every day 35million plastic bottles are sold in the UK, with many ending up as rubbish or litter instead of being recycled
The councils then sort the waste and make money by selling on bottles and cans to recycling companies.
A number of local authorities have claimed that losing this money could put a big hole in their budgets.
However, research by waste and recycling experts Eunomia shows that any losses they make will be more than covered by savings generated by a deposit return scheme scheme, or ‘DRS’.
Researchers at Eunomia said the net saving ranged from £60,000 to £500,000 a year, depending on the size of the council. It said the figure for England alone could reach £35million a year.
The savings result from having fewer containers to collect and sort, as well as less money spent on clearing litter.
Councils would also have reduced landfill charges, which are a tax they have to pay for rubbish that is dumped rather than recycled.
A consortium comprising Keep Britain Tidy, the Marine Conservation Society, Surfers Against Sewage, Campaign to Protect Rural England and Reloop, funded the study.
The Daily Mail has turned the spotlight on the dangers to the environment, wildlife and food posed by plastic through campaigns on plastic bags, microbeads and coffee cups.
Every day 35 million plastic bottles and 20 million aluminium cans are sold across the UK and many end up as litter, in our oceans or in landfill sites.
Michael Gove has signalled support for the direct recycling scheme, with Surfers Against Sewage urging him to build on the plastic bag tax
Evidence from other countries, including the US, Norway and Germany, shows that the introduction of a simple deposit on plastic bottles and cans can raise collection rates above 90 per cent and reduce littering.
The Environment Secretary, Michael Gove, has signalled support for the idea. The administrations in Scotland and Wales are also looking at it.
Chief Executive of Keep Britain Tidy, Allison Ogden-Newton, said: ‘There is no doubt that introducing a deposit refund system would reduce littering in this country but, until now, there has been a concern that it would have a negative impact on cash-strapped councils.
‘This report shows that in fact a DRS would create savings for local government.’
Litter Programme Director at CPRE, Samantha Harding, said: ‘There are no longer any valid arguments that DRS doesn’t work. The environmental case is crystal clear.
‘For our coasts and countryside, the cost of not taking action will be far greater than any incurred by the parts of industry that are trying to block this.
‘Michael Gove can now build on the success of the Government’s plastic bag charge and the ban on microbeads by confirming England will have a deposit system.’
Hugo Tagholm, of Surfers Against Sewage, said: ‘Deposit refund schemes are a tried-and-tested way of dramatically increasing recycling rates while reducing plastic bottle and other container pollution on our beaches, in our streets and across the countryside.’
Sue Kinsey, Senior Pollution Policy Officer from the Marine Conservation Society, said: ‘We know from evidence around the world that deposit return systems decrease litter and increase high quality recycling.
‘This report shows that such systems will also save local authorities money and we strongly urge the Government to introduce a DRS into England ensuring that it dovetails with any systems in Scotland and Wales.’