Town halls are facing widespread redundancies or up to £10 million of cuts to cover an unexpected rise in landfill tax.

Council tax increases are also being predicted after Chancellor Gordon Brown announced a huge rise in landfill tax for the next three years.

Brighton and Hove, East Sussex and West Sussex councils are now facing a £10 million shortfall after all had budgeted for a £3 a tonne increase, rather than the £8 annouced in the Budget.

Keith Taylor, head of Brighton and Hove's Green group, said: "At a time when we are predicting that Government grants to the city council will be pegged at this year's level for three years the only way the council will be able to afford this will be to cut jobs or services.

"Naturally Greens want to see more recycling and re-use instead of landfill and incineration but this simple increase in tax does very little to encourage that and will be seized by Labour and Conservative supporters of incineration as a justification for burning waste.

"What the tax increase doesn't do is to reduce the amount of waste we create and that is a major failing."

A partnership between East Sussex, Brighton and Hove and waste contractor Veolia is expected to cut the amount of rubbish sent to landfill.

A new incinerator planned for Newhaven will burn huge quantities of waste, transforming it into electricity, and a waste-sorting station in Hollingdean, Brighton, will allow more materials to be recycled.

But this still leaves the cash-strapped city council with another £2.1 million to find in the next three years.

City councillor Gill Mitchell said the tax was an incentive to recycle more, adding the amount of waste thrown out by residents had fallen by seven per cent in the last three years.

She said: "We have looked over the parapet and could see what was coming and that is why we set up a PFI contract and started to get waste down a long time ago."

A spokesman for East Sussex County Council said that it would need to find £3 million more over the next three years.

He added: "This is an unexpected budget pressure and we will now consider how to deal with this issue."

West Sussex County Council revealed it would need to locate another £4.5 million to pay for the higher charges.

The council is looking at introducing new landfill sites but said yesterday that it had also been successful in increasing recycling rates.

A spokesman said: "The Chancellor said the change is to encourage greater diversion of waste from landfill and more sustainable waste management options.

"This endorses policies West Sussex County Council has been pursuing for some years now with a wide range of award-winning waste-reducing initiatives.

"These policies have seen our household recycling rates climbing to over 33 per cent per cent, with the ultimate goal of over 50 per cent by 2015."

The council is to sign a multi-million pound waste management contract next year which will mean more rubbish can be recycled.

The spokesman added the council was already looking at £15 million of savings this year which would help plug the funding gap.

Is extra tax a fair way to make us go green? Have your say below.