OLD and written-off cars could be left to rot in the streets as new legislation forces scrap yards out of business.

Under European laws which are due to take effect in April, so-called end-of-life vehicles (ELVs) must be disposed of without harm to the environment.

The laws classify all ELVs as hazardous waste until pollutants such as lead, cadmium and mercury have been removed, and specify that they can be handled only at approved treatment centres licensed by the Environment Agency.

The legislation follows similar laws governing the scrapping of fridges, which led to a fridge mountain when the Government failed to make provisions for their environmentally friendly disposal.

It has yet to decide who should meet the extra cost of complying with the laws on motor vehicles, and is looking at adding a tax on new cars, getting the last owner to pay or forcing the manufacturer to foot the bill.

Tom Benson, of Bell's Breakers, in Stanley, County Durham, predicted that the extra cost of scrapping vehicles, estimated as £40 to £50, will fall to owners.

He said: "The price is going to fall back on the customer who is running the car.

"We have got about 400 vehicles here now and we are going to have to pay to get rid of them.

"If we can't afford to do it, we are going to go bankrupt."

With scrap dealers already operating on a small profit margin, making only £5 to £10 per vehicle on recoverable materials, many have already gone out of business.

Mr Benson said the legislation would result in more firms folding and an increase in the number of vehicles being dumped, which is already a problem in the region.

"It will end up like America, with cars just being dumped on the streets," he said.