The decision to withdraw PFI credits vital to financing the projects was taken after Government decided it was backing enough schemes to fulfil the EU’s target of reducing waste sent to landfill in the UK.

All other planned projects other than 29 already earmarked for support will also be stopped in their tracks.

Most advanced projects hit are Skanska’s waste-to-energy plant in Bradford and AmeyCespa’s in Allerton, North Yorkshire where Vinci was main contractor on the £65m job.

It is a particular blow for Skanska, which was gearing up for its debut project in the specialist energy from waste market with joint venture partner AECOM .

Another scheme planned for Merseyside and Halton has also had its financial support withdrawn.

The decision is a huge blow to sector and means that no other scheme than the 29 earmarked for support will be built for the time being.

A DEFRA spokesperson said: “We are investing £3.6 billion in 29 waste infrastructure projects. This will reduce the amount of waste sent to landfill, promote recycling and stimulate economic growth.

“We now expect to have sufficient infrastructure in England to enable the UK to meet the EU target of reducing waste sent to landfill. Consequently the decision has been taken not to fund the remaining three projects.

“This does not necessarily mean the three projects will stop. That will be a decision for the Local Authorities concerned. We will continue to provide commercial and technical advice to those projects that continue with their procurement process.”

Councils are now looking at how to make up the project funding shortfalls but with budgets stretched firms are not holding out hope of alternative funding.

Patrick Twist, Infrastructure Partner at Pinsent Masons, said: “The Government had previously withdrawn credits from seven projects in 2010 but allowed these three to proceed.

“It is difficult to reconcile this very late withdrawal of support by Defra with the Coalition’s stated commitment to investing in economic infrastructure and boosting the construction industry.

“Without Waste Infrastructure Credits, the three projects are unlikely to proceed.”

Schemes built and going ahead