The Co-op supermarket plans to switch all of its own-brand water to 50% recycled plastic bottles in a move it expects will present an “ethical dilemma” to customers.

The new bottles will have a cloudier and greyer appearance than those that do not contain recycled plastic and the Co-op said it accepted that they could test shoppers’ environmentally conscious credentials.

The new bottles, which are 100% recyclable and sourced in the UK, will be in stores later this year.

The supermarket has estimated that the change to all of its own-brand still, sparkling and flavoured water bottles will save almost 350 tonnes of plastic every year.

It has also said it plans to rid its aisles of black and dark coloured plastic by 2020 because it is harder to detect by sorting machines due to its pigment and contaminates the recycling stream, reducing the usefulness and value of the recovered material.

Co-op Food’s chief executive, Jo Whitfield, said: “Our customers expect us to respond to this challenge and help them make more ethical choices, and we’re dedicated to doing just that.

“Making these changes will also create new uses for recycled materials which in turn gives our customers greater confidence in recycling.”

Iain Ferguson, Co-op environment manager, said: “Suppliers are working hard to make the bottle clearer – and they already have.

“In the meantime, our bottles will wear this greyish colour which I see as a badge of honour – we are part of the market for recycled products and are proud of that.”

The Co-op said it fully supported government plans announced this week for a deposit return scheme to cut plastic bottle waste.