Dealing with waste is a becoming a social and economic problem as well as an environmental challenge, Elliot Morley has said.

The environment minister's warning came as it was announced that millions of pounds are to be made available to help local authorities fund sustainable waste management initiatives.

The government is set to invite bids for the cash from local authorities in England from this autumn.

A total of £135 million is to be made available from the Waste Minimisation and Recycling Fund.

"How the country deals with its waste is becoming one of the most significant social, economic and environmental issues facing society today," warned Morley.

He also pledged that from 2005/06 a new fund that will also provide reward grants for meeting agreed performance criteria will help meet the government's key objectives.

"The new grant will give authorities more flexibility on how to achieve the good practice currently emerging from local waste minimisation, recycling and composting projects," said Morley.