The "dig and dump" solution to the decontamination of urban regeneration sites will have to be re-thought in the wake of changes to the rules and regulations, lawyers are warning.

Much of the soil removed from ambitious development projects around the UK - with the West Midlands being among the fastest regenerating regions - has been badly polluted over centuries of continuous industrial use.

This material can't simply be dumped in the nearest landfill, but the number of sites registered to handle potentially dangerous waste of this kind has dwindled dramatically, according to Richard Chalkley, Midlands-based partner and environment specialist with international law firm Reed Smith.

Since 2004, hundreds of UK landfill sites have had to decide whether to register to continue to handle hazardous waste.

Stringent standards of care in dealing with hazardous waste, driven by European regulations, mean it is much more expensive for landfill operators to register for the highest category of waste-handling.

"Of over 250 landfill sites formerly registered to accept hazardous waste in the UK, only around 17 have chosen to re-register for the highest disposal category, and few of these are located in the Midlands," Mr Chalkley said.

The nationwide emphasis on regenerating brownfield and contaminated land has seen increased demand for disposal facilities that can handle the resulting spoil, even though disposal charges are more than double those for non-hazardous waste.

Rebecca Warren, also an environmental specialist with Reed Smith, drew comparisons with the "fridge mountains" of the 90s when new regulations were introduced to prevent damaging CFC gases adding to global warming when obsolete refrigerators were broken up for scrap.

The situation is considered so urgent that the Government has granted temporary permission for hazardous waste to be stored where it is created until a solution can be found.

"This may result in inappropriate storage solutions in locations that would otherwise be unacceptable for waste transfer or disposal facilities," Mrs Warren added.

However Mr Chalkley believes the situation could present an opportunity to increase recycling and reusing waste while enhancing the UK's green credentials.

Using shredded tyres for road building hardcore and a heat source for cement kilns, are among the more innovative solutions.

John Hale, a director of Midlands-based consultancy Alliance Environment and Planning, said: "Exceeding landfill allowance could result in fines being levied on local authorities, which in turn are likely to be passed on to the public in the form of council tax increases."

Some estimates put the penalties as high as £500,000 a day.

"Diverting wastes from landfill is dependent on many new waste treatment sites being permitted, making the targets on recycling just the tip of the iceberg. Under the European Directive governing waste management, local authorities have to meet certain targets by 2010, 2013, and 2020.

"An innovative scheme enabling prudent authorities to trade excess allowances with those struggling to achieve the targets might alleviate the situation."