Royal Mail was warned today not to unleash an avalanche of "unnecessary rubbish" on households as it manoeuvres to increase the amount of junk mail it can deliver. Sandy Bruce-Lockhart, chair of the Local Government Association (LGA), said he had "grave concerns" about a deal to ease junk mail delivery limits that Royal Mail is negotiating with the Communication Workers Union (CWU).

Details are still to be finalised, but Royal Mail has essentially won an agreement with the CWU to lift the restriction that limits unaddressed mailings to households to three items a week. It is thought a final agreement will be reached soon. Lord Bruce-Lockhart has written to Royal Mail's chief executive, Adam Crozier, expressing concern that the spiralling costs of disposing of more and more junk mail will leave council tax payers facing bigger bills. Junk mail also hurts the environment, he said.

The LGA said 78,000 tonnes of junk mail already reached landfill sites each year and that the cost of disposing of overall waste had risen in the last 12 months by £205m, or 15%, to a total of £2.6bn. The Treasury has indicated that local authorities will not be given extra money to account for increasing landfill and recycling costs, the LGA said.

A spokesman for Royal Mail said the idea was not necessarily to increase the sum total of junk mail but to win a greater proportion of the lucrative business of delivering direct marketing mailshots. Royal Mail delivered 3.3bn items of unaddressed mail last year, an increase of 12.5% on the previous year, and the business is estimated to account for revenue of around £800m.

The LGA's warning comes after Royal Mail suspended postman Roger Annies, 48, last month for delivering a leaflet to customers in Barry, South Wales, advising them of a little-known form they could fill out to avoid receiving mailshots. Mr Annies was praised by some as a "hero postman" and a number of his customers criticised the Royal Mail for moving him to a backroom role after a disciplinary hearing. After news broke of his disciplinary action, the Direct Marketing Association said 200,000 extra people had signed up to the Mailing Preference Service, which removes people's details from companies' mailing lists.

The website of Postwatch, the watchdog for postal services, has information about the Mail Preference Service and other ways of reducing unsolicited mail. Today Lord Bruce-Lockhart said: "More junk mail for services people do not want or need will only lead to an increase in the amount of unnecessary rubbish created and could place further pressures on the council taxpayer through no fault of either the council or local people. "This comes at a time when councils are trying to minimise waste, increase recycling and are striving to provide value for money to the taxpayer. Every extra tonne of rubbish that goes into landfill costs the taxpayer an extra £100."

However, a Royal Mail spokesman said the LGA was "entirely wrong in thinking anything Royal Mail has done will lead to 'unlimited' amounts of unaddressed mailings being sent to people's homes". The spokesman went on: "75% of unaddressed mail is delivered by rivals - and if Royal Mail did not deliver any of this mail then it would simply be posted through people's letter boxes by other operators."

Research published last month indicated that 22% of unsolicited mail, much of it from banks and credit card companies, went straight in the bin, but householders clearly do respond to some of it. The study found that unsolicited mail that had a householder's name on it was more successful and 70% of "blind" mail addressed to "the occupier" was put straight in the bin.

Meanwhile today, Postcomm, the postal regulator, launched an inquiry into complaints that letters are being collected from post boxes as early as 9am. Residents in areas including South Wales, Derbyshire and Ipswich complained that collections are being made before their post was delivered, giving them no time to respond to correspondence on the same day. Postcomm announced a three-month consultation to check details of when post was being collected and delivered before deciding whether to order any changes.