Environment minister John Gormley's refusal to sign off on the proposed Poolbeg incinerator risks costing the taxpayer €500,000 per day in EU fines. Without the incinerator, Ireland will be unable to meet its commitments to reduce the amount of waste sent to landfill sites, a failure that could lead to fines of up to €270m per year, according to an independent report.

Gormley has come in for increasing criticism in recent weeks for holding up a project that was first mooted over a decade ago. The incinerator is due to be built in the minister's Dublin South East constituency and, along with all TDs in the area, he has openly opposed it.

It has already been approved by An Bord Pleanála, the Environmental Protection Agency, the National Development Finance Agency and the Department of the Environment, so the only outstanding issue necessary for the project to go ahead is the granting of a foreshore licence for the construction of a water cooling system.

The licence has been in Gormley's department for some months and his critics claim that he is "dragging his heels on the project" and using the issue of the foreshore licence as a "smokescreen" to avoid making the politically unpalatable decision.

An independent report commissioned for waste management company Greenstar says that if we do not reduce the amount of waste going to landfill, Ireland could face fines of €180m-270m per year for failing to comply with EU landfill directives.

"John Gormley should step aside from this issue as he is hopelessly compromised," a waste-industry insider, who did not wish to be named, told the Sunday Tribune. "Senior civil servants have never seen a situation like this before where a minister is actually acting against the public interest and costing the state money. This is the elephant in the room that will cost hundreds of thousands of euro."

Another informed source said, "This type of action sends shudders down the spines of investors and Ireland gets classified as a country not to be trusted."

A spokesman for US ambassador Dan Rooney confirmed to the Sunday Tribune that Rooney would meet Gormley in the coming weeks to express his concerns at the delay, as US company Covanta is behind the Poolbeg project.

When asked if Gormley was dragging his heels on the foreshore licence, his spokesman said, "I utterly reject this. The department is dealing with a backlog which occurred at an administrative level. This application will be dealt with in exactly the same way as all others.

"The minister has a quasi-judicial function that must be capable of standing up to scrutiny."