The minister has told council managers they are barred from entering into 'put or pay' deals with operators under which they undertake to provide a minimum quantity of waste to incinerators or landfills.

Some sources had claimed the move would cripple the development of an incineration industry in Ireland but, according to Indaver, the move will have no effect on their plans, which do not involve 'put or pay' deals with local councils.

"Both our projects will be merchant facilities where we will do business with waste collectors, " said the company's project director, Jackie Keaney.

"We're not looking for longterm 'put or pay' contracts with local authorities."

But Keaney, who is also a vice-president of the European waste to energy association (CEWEP), said the move could affect the development of Dublin City Council's proposed Poolbeg incinerator.

A spokeswoman for Dublin City Council said the council could not comment on the issue as their incinerator was currently going through the planning process.