A New Zealand tyre recycling plant previously praised as an environmental asset is now a disaster waiting to happen, the Waikato Times newspaper reported.

Rubber Technologies, contracted to recycle up to 40% of the country’s used tyres, has gone into liquidation leaving a potential environmental disaster in its wake, the paper said.

The Waikato Times said that the company was paid to collect used tyres from Bridgestone and Firestone outlets in New Zealand#;s upper North Island but plans to recycle them failed and 100,000 tyres now lie in mountains on two sites in Te Rapa, on the outskirts of the city of Hamilton.

The New Zealand Fire Service told the newspaper that a blaze at either site could be a major environmental disaster which could see city families evacuated from their homes as toxic smoke billowed over northern suburbs.

Opening the plant late in 2000, deputy prime minister Jim Anderton called it “an excellent example of environmental sustainability”, the Waikato Times said, adding that there had been plans to increase staff from five to 40 within a year.

Now, the newspaper said, a question hangs over who is responsible for the tyres.

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Liquidator David Blanchett told the newspaper it is now the land owner’s problem but Environment Waikato resource use group manager Harry Wilson said the regional council had no power to force the company to remove the tyre pile.

A spokesman for the land owner, Grasshopper Developments, said he was working to ensure the pile was removed and had stepped in to stop Rubber Technologies adding more tyres to one pile as recently as last month, the Waikato Times said.

The newspaper said that Bridgestone Firestone New Zealand is refusing to accept responsibility for the tyres, despite labelling itself an environmental leader over its contract with Rubber Technologies.

When asked by the Waikato Times whether the company would accept any responsibility for the tyre pile, company spokesman Greg Neville responded: “Why should we?”

The newspaper said that Bridgestone general manager John Staples, in a statement on the company website early last year, said the company had long recognised its responsibility to dispose of its used tyres.

“With this scheme we are…ensuring that our tyres don’t end up being discarded in rivers or on the land. The New Zealand recycling scheme establishes Bridgestone Firestone as a leader in cradle-to-grave product responsibility,” the statement said according to the Waikato Times.

The newspaper, citing a Hamilton city official, said council environmental management staff had been assured by the failed tyre recycler that, once appropriate equipment coming from overseas arrived, the business would be viable.

Rubber Technologies#; owners referred the Waikato Times#; queries to the liquidator who said the company had no major assets outside its tyre recycling equipment which had cost “the thick end of half a million [$NZ]”.

The liquidator told the newspaper that the company had not secured sufficient markets for its products.

Local fire chiefs were furious last December when a fire was lit in a smaller pile which had been illegally dumped beside the main pile of tyres, the Waikato Times added.