Hunts Refuse Disposals has given back its waste disposal licence for the Helpston dump near Peterborough to Cambridgeshire County Council, the waste regulatory authority.
That means the council can no longer compel the firm to contain or reduce pesticide contamination in the limestone aquifer below. Any attempt to enforce a clean-up will depend on an expensive, complex and uncertain legal action and taxpayers may end up footing the bill.
Pesticides have spread through the groundwater and three years ago they were detected over a mile away at Anglian Water's Etton borehole, which serves 40,000 people in Peterborough.
Filtration equipment has been installed which reduces the pesticide levels in drinking water to below the European Community's cautious limit of 0.1 micrograms per litre. But the National Rivers Authority, the Government's water pollution watchdog, has drilled test boreholes for sampling and commissioned studies which indicate that the contamination is spreading.
The authority is taking legal advice and considering ways to tackle the contamination. 'A solution will not come cheaply,' its local environmental manager, Bill Forbes, said.
Hunts, based in nearby Huntingdon, returned its licence to the county council in March this year having dumped hundreds of thousands of gallons of diluted pesticides at the tip over several years in the 1980s. Its licence conditions allowed this.
In March 1992 Cambridgeshire told Hunts it wanted to alter its licence conditions to prevent further pollution. The firm appealed against this but, before a decision was reached, returned its licences.
Friends of the Earth says the case demonstrates the need for laws forcing waste disposal firms to retain responsibility for dumps until they have left them safe.
The Government was to bring in such laws on 1 April under its 1990 Environmental Protection Act, but they have been delayed indefinitely.
The National Association of Waste Disposal Contractors deplores the delay. So do the industry's professional body, the Institute of Waste Management, and the Association of County Councils.