Plans to fit wheelie bins with microchips as part of a scheme to boost recycling were backed by the Government yesterday.

Eric Pickles, the Communities Secretary said the Government would not go ahead with plans for “a pay as you throw” rubbish scheme — considered by Labour — which penalised households.

But Mr Pickles did back a scheme piloted by Windsor and Maidenhead borough council where families are rewarded with shopping and restaurant vouchers the more they recycle.

Under the scheme household bins, fitted with microchips, are weighed when they are collected. Those who put out more recyclable waste build up points throughout the year which can be exchanged for vouchers for local shops worth up to £130.

Yesterday Windsor and Maidenhead rolled out the scheme for 60,000 households in the borough but local government chiefs warned against any nationwide programme.

Gary Porter, chairman of the Environmental Board for the Local Government Association said councils should be able to choose which scheme to implement.

He told the Times that the plan would be much more difficult to implement in blocks of flats where householders are often encouraged to tip their recyclable waste into one or two big bins. “It will be interesting to see how Windsor and Maidenhead pan out but I certainly don’t favour a national scheme,” said Mr Porter.

“We have to do something to keep down landfill charges but it should be up to local authorities if they want to introduce incentive schemes, implement alternate weekly collections or do something else,” he said. “Collecting and processing waste already costs £3 billion a year and is due to rise to £4 billion by 2014,” said Mr Porter.

But privacy groups yesterday warned that although bin taxes had been taken off the agenda for now the same intrusive chips would be used. “It’s good that bin taxes have been abandoned for now,” said Alex Deane, Director of Big Brother. “They symbolised the worst of our Big Brother state — snooping on our private waste and charging us for the privilege.

“But these punitive and vindictive taxes were at least out in the open. Now exactly the same microchip technology is being introduced with the bribe of an ‘incentive scheme’” he added.

“The environment and ‘user rewards’ are being used as twin stalking horses for eventual pay-as-you-throw schemes by the back door.”

Labour tried to set up pilots for both charging and incentive rubbish schemes when it was in government but no councils signed up to test the scheme.

Yesterday Mr Pickles denied that the scheme could actually create more waste as families rushed to buy more goods to boost points. “That’s just ridiculous. You should treat people with respect instead of having a bunch of bin inspectors or bin police.”

The reward scheme would increase the recycling rate and put money back into the economy, he said. “What we are looking to do is to make this country one of the green economies of Europe and to do that we need to increase our recycling rate and we believe this incentive scheme is the best way of doing that.”

Under the Windsor and Maidenhead scheme which will be phased out to all properties between now and January next year, households will be able to put all recyclable goods in one blue wheelie bin equipped with an ID tag which matches the bin to the household address and account number. Everytime a household presents its bin for collection the recycled content is weighed and households will be rewarded 5.5 points for each kilo of waste recycled.

The sixth month trial was voluntary but 70 per cent of households participated, earning up to six million points so far, while increasing the total recyled by 35 per cent.

Recycling rates have improved markedly over the last few six years. Last year in the UK we recycled or composted 11 million tonnes of our household waste was recyled or composted compared to 5.2 million tonnes in 2003/4. Over 221 councils collect their waste fortnightly, 51 per cent of town halls in the UK