The community company has vowed to carry on collecting and wants the 25,000 households it serves to keep filling their recycle boxes rather than the new ones Sita is due to begin distributing next month.

"Your materials are worth money that Kerbside uses to help disadvantaged people into employment," said Kerbside boss Paul Bran-nigan. "We will continue collecting recyclables for as long as we can afford to but Calderdale Council and Sita also want your recycling – you have a choice."

Kerbside's contract to collect from Todmorden, Hebden Bridge, Mytholm-royd, Luddenden Foot, Copley and Skircoat is due to run out on August 1.

It was expected the 18 Kerbside staff would continue to be key component of the new refuse system but the deal fell through.

Although they have all been offered jobs with Sita, most have chosen to stick with Kerbside, without any guarantee of long-term jobs.

Patrick Phillips, a director of Kerbside who has been involved in detailed talks with Sita, said: "We have been led up the garden path by Sita and they have been allowed to get away with this by a weak council."

"We were delighted when Sita won the contract but within a month they showed their true colours and put up silly terms and conditions we could not possibly accept."

The council has expressed regret about the fallout.

"We have made it clear that the obligation for Sita to seek to involve the voluntary sector in the provision of services still remains and we will ensure Sita fulfils this commitment," said health and social care director Jonathan Phillips.

"Our top priority is to ensure every household has an excellent recycling service and we will make every effort to ensure Kerbside staff continue to contribute to recycling," he said.

A spokeswoman for Sita said: "There are ongoing discussions between Kerbside and the council and, until these have been exhausted, we are unable to comment."

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