A refuse company has walked out on its contract with a council, claiming it is losing money.

The contract between Arun District Council and Onyx, which still has eight years to run, had been in trouble for several months.

The council today sought to reassure residents by saying a regular refuse collection would continue despite Onyx's decision.

It said it would be business as usual until alternative measures were put in place.

The council has to decide whether to bring the service back in-house or call in a private contractor under emergency procedures.

Gary Smith, from the GMB union, which represents the refuse collectors, said: "We have said the contract has been in trouble for a long time and predicted this would occur.

"Now the local authority needs to do what is right by the workforce, as this is an uncertain time for them.

"We think the only course of action, and the most viable, is to return the service in-house.

"The Brighton and Hove experience has shown it can work."

Last November, members of the union won a 20 per cent pay rise after thousands of homes in the Bognor, Littlehampton and Arundel areas were affected when binmen held a one-day strike and threatened further action.