Paper, glass and plastics could end up back in landfill sites because of pressure on councils to recycle more and more waste, a leading group of engineers has warned.
Local authorities might be taking a "quantity not quality" approach to processing waste to avoid exceeding their landfill allowance, said the Institution of Civil Engineers (ICE).
The group has called for a multi-billion pound drive to improve the quality and value of reusable materials so they could be re-sold as quality goods.
Reducing the demand for goods made from raw materials could help reduce carbon emissions because most recycled materials have a lower carbon footprint, said the report.
ICE waste and resource management expert Jonathan Davies said: "The UK's waste management policy has been too narrowly focused on diverting waste from landfill and local authorities are stepping up to the challenge to avoid fines by increasing the quantity of recycled material.
"We still need more action to drive up the quality of the material being produced. Without this, the UK could generate increasingly poor quality recycled materials for which there are few buyers, and ironically their most likely final destination is landfill.
"In a world driven by carbon reduction and global competition for resources, it is time for the UK waste industry to evolve from a disposal sector into a supply sector that unlocks the real economic value of materials in a low carbon fashion."
The institution called on the Government to use some of the £842 million a year generated by the landfill tax to fund the proposed Green Investment Bank.
A spokesman for the Department for Environment, Food and Rural Affairs (Defra) said: "We welcome this report by the Institution of Civil Engineers - a very timely input to the current review of waste policies in England. It contains some interesting ideas and policy suggestions which we will look at in detail as part of our review."
The UK produced 334 million tonnes of waste in 2008, with materials such as paper, plastics, glass, wood and metals making up a third of the total. Councils face fines of £150 a tonne if they landfill more than their allocation.