Officials last night said decades of recycling progress in the UK was under threat as a result of the decision, which could see millions of tonnes of harmful plastic waste heading to landfill.
Britain currently sends around two-thirds of its used plastic to China.
But in a drive towards self-sufficiency, presented as a campaign against yang laji, or foreign garbage, the country will no longer accept recycled plastics from March next year.
The Chinese Government has also announced increased quality standards for other imported waste such as cardboard, which together promise to throw councils’ recycling operations into chaos.
Local government representatives have said the move will have a “major impact” on finances which in turn are likely to affect rates and bin collections services.
Currently local authorities make money by recycling, which offsets the cost of their operations.
Either they sort the reusable material themselves and sell it on to merchants, or, if not sorted, they can pay recycling contractors to take the waste for a smaller fee than traditional landfill or incinerator owners will charge.
The closure of the world’s biggest recycling market means approximately 540,000 tonnes of plastic waste a year may now have nowhere to go.
While other manufacturing nations such as Malaysia and Vietnam accept recycled plastics, their capacity will not account for the lost Chinese market.
Lee Marshall, chief executive of the Local Authority Recycling Advisory Committee, said: “Budgets are very tight and it’s possible councils who were not already considering tax rises will now be considering that as a result of this.
“It’s likely that they will try to find the savings by cutting waste services.
“Some places in England already have three-weekly collections so there could be more of that, as well as reduced opening times at tips.
“It will not be popular.”
In August an investigation by The Daily Telegraph revealed that more than a million households are now being forced to accept bin collections every three or four weeks.
Experts have warned that the more plastic that is disposed of conventionally, the greater the chance it will leak into the environment.
The news comes a week after a nationwide beach cleanup found the amount of plastic pollution on Britain’s coastline has increased 10 per cent in the last year.
Analysis of customs data by Greenpeace indicates that Britain has shipped more than 2.7 million tonnes of plastic waste to China since 2012.
Mr Marshall said that even if smaller nations like Malaysia had the capacity to accept the UK’s recyclable waste, they may not offer a price to render sorting and shipping it worthwhile.
Stuart Foster, CEO of the recycling charity Recoup, said the Chinese embargo could present an opportunity.
“If you could get the link in place with UK manufacturers making plastic products, so that it makes business and environmental sense to use the recycled content and at the same time build up the recycling infrastructure in the UK, this is a real opportunity,” he told The Guardian.
He and representatives of other charities questioned the Government’s preparedness for the change.
A spokesman for the Department of Environment, Food and Rural Affairs said: ““We are continuing to work with the waste industry and the Environment Agency to understand the impact across the sector of the Chinese government’s proposed restrictions on waste imports.
“We are also looking at ways to process more of our recycling at home as part of our resources and waste strategy.”
According to European Union targets, the UK must recycle at least half of all household waste by 2020.
The figure is currently 43 per cent.