LANCASHIRE County Council is being sued for £5million in a dispute over a recycling contract.

A hearing began this week between the council and Environmental Waste Controls (EWC), which claims it should have been given the contract to manage Lancashire’s waste recycling centres.

The Merseyside-based firm claims its offer was £3.5million cheaper than the winning tender while remaining environmentally-friendly, and is seeking damages as compensation for missing out on the lucrative £20million, three-year contract.

Lancashire County Council would not comment while the case, at Manchester High Court, is ongoing.

But Bill Edwards, chairman of the board of directors at EWC, said: “We would have been much cheaper. It’s unusual for there to be such a big price difference.

“We believe a number of things we offered were overlooked.

“We guaranteed we would do at least 55 per cent recycling, and if not we would pay for the landfill tax.

“I have been in this industry for 16 years and never known a situation like this before.”

The contract covers the management of Lancashire’s existing centres for recycling domestic waste, and is not related to the £2bn private finance initiative contract for waste transfer stations or the planned building of new plants to recycle trade waste in the coming years.

EWC’s lawyer, Jonathan Berkson, of solicitors Hill Dickinson, said the case would hinge on whether the county council had conducted the tender process properly and if not, whether EWC was entitled to compensation.

Steve Browne, the council’s director of waste and natural resources management: “As the trial is ongoing it is inappropriate for us to comment at this time.”

Waste giant SITA won the waste transfer stations contract.