The state government will provide $13 million to councils and industry to help them meet the increased costs.

The crisis, sparked by restrictions China placed on its importation of recyclable materials this year, has seen councils and contractors facing ballooning costs and the expensive prospect of putting kerbside recycling into landfill.

Cr Beard said it remained unknown how the costs would be met after June 30. “We still don’t believe it should be falling straight back on local government,” she said. “We’re still trying to get our heads around what the future will be. This is still only a band-aid solution.”

Warrnambool City Council director of city infrastructure Scott Cavanagh welcomed the short term assistance and said the council looked forward to developing a long-term solution with the assistance of the state government.

“Although we are yet to find out details of the support, council would have found it very difficult to find an additional $200,000 between now and the end of the financial year to continue recycling,” he said. “The Victorian Government has accumulated about $500 million from the landfill levy in recent years so it is great to see some of this money going towards waste management. The State Government should not be so quick to abrogate responsibility in this area after July 1.”

Mr Cavanagh said councils faced a highly biased negotiations window and dealt with a narrow supply of companies in the recycling field. “Waste management is a core business of local government,” he said. “However, when the State Government accumulates hundreds of millions of dollars through a tip tax, they make waste management part of their core business.”

Wheelie Waste general manager Chris Philp said it was good that the state government had acknowledged what industry and local government had been saying. “Originally it seemed they had wiped their hands of it,” Mr Philp said.