A council has threatened families with a £2,500 fine and a criminal record if they put out bins that are too full.
Households which leave out their rubbish before or after allotted times would also be breaking the rules under new anti-social behaviour laws.
Businesses, including local shops, could also face penalties of up to £20,000 for not dumping their waste in line with the changes.
The council warning came despite the fact that in some areas rubbish is only collected once a fortnight or month.
This has left some homeowners complaining about the health hazard when bins are left to fester.
Households deemed to be committing offences have nonetheless been sent threatening letters over their “unreasonable conduct”, which affects the “quality of life” in neighbourhoods.
Stoke-on-Trent issued the warning notices, while other local authorities across the UK are thought to be planning similar aggressive strategies that include threats of criminal convictions.
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James Price, of the TaxPayers’ Alliance, told the : “It beggars belief that council workers think this is an acceptable way to treat taxpayers.
“One of the main services people expect from their councils is efficient bin collections, and they will be rightly shocked to see their money spent on threats of this nature.”
Andrew Allison, of the Freedom Association, said that the government needed to act to “prevent councils from behaving in this way”.
Some town halls have already installed CCTV cameras on bin trucks to monitor how households dump their rubbish, while in some areas dustmen have been ordered to pick through waste in green bins to ensure it is not contaminated with material that is not recyclable.
Stoke-on-Trent City Council sent out its warning letters to residents on at least two streets over the summer.
The council said it acted to tackle the “severe inconvenience” to neighbourhoods when rubbish was dumped in way that was outside of the rules.
A spokesman said: “We appreciate the letter might come over as harsh but this is a legal warning informing people that their actions are causing a problem.”
Lilian Dodd, the city’s Deputy Lord Mayor, also defended the letters.
She said: “If people are continuously flouting the law with bins then they should receive a warning letter and hopefully they will respond appropriately. The level of fines being threatened does seem slightly extreme but this has to be done because of the mess in the streets.”
Tameside council in Greater Manchester also has a “waste policy and enforcement strategy” allowing it to issue prosecution threats to householders who do not meet “expectations”.