NEZAHUALCOYOTL, Mexico (Reuters) - Mexico City is facing a crisis over where to put its trash -- enough to fill four sports stadiums a year -- with its sprawling dump already crammed to bursting and under a closure order.

A government employee works at the Nezahualcoyotl dump site in Mexico City February 6, 2009. REUTERS/Daniel Aguilar

One of the world’s biggest landfills, the Nezahualcoyotl dump site is a fifth the size of Manhattan and sits inside the urban sprawl of the fast-growing Mexican capital.

Mexico City is built on a dried-out lake bed first settled by the ancient Aztecs and grew at such a frenetic pace in the 1980s and 1990s that it now envelopes outlying villages, the dump and the international airport.

Now, mountains of refuse piled several stories high are pressing against a major drainage canal that runs along the dump’s edge. That risks a rupture that could flood residential areas and the airport with stinking effluent and grime, says the federal government which ordered the dump closed in January.

But city officials are stalling in court, arguing that the danger is exaggerated and asking for more time to implement ambitious recycling and green energy projects.

“If the canal breaks it would be a disaster, you would have thousands of people inundated with sewage,” said Mauricio Limon, an official at the Environment Ministry, which has been trying to close down the landfill for years.

“More time in operation means more polluting methane ... tainted aquifers, more contamination of the surrounding areas, damaged wildlife and bad odors,” Limon said.

Mexico City’s left-wing government is facing off with the ruling conservatives to keep the dump open and find green alternatives to absorb the 12,500 tons of garbage produced each day by the capital’s 20 million residents.

City officials say garbage can be heaped up at the 4-square-mile (10-square-km) site on the edge of Mexico City for several more years. Small privately run landfills are offering their services, but at triple the price and with less space.

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“If we close it, they’ll start chucking it wherever they can. Soon this garbage will be in our ditches,” said Martha Delgado, the city’s head of environmental policy. “Crises should give us opportunities to change. We need a profound transformation in the way this city deals with its waste.”

WORMS TURN INNARDS TO COMPOST

Mexico City launched a campaign several years ago to teach households to separate organic waste from recyclables. Sorting centers were built to replace informal workers who rake through trash for scraps of metal, plastic and paper.

Despite that, only 15 percent of the city’s garbage is recycled, compared to up to 60 percent in parts of Europe.

There are no waste reduction programs. Styrofoam plates, cups and plastic straws pile up at taco stands and shoppers pack groceries into doubled-up plastic bags.

Mayor Marcelo Ebrard, with one eye on a future presidential bid, has made strides toward making the capital greener, adding cycle lanes and public transport. Now he has big plans for a $186 million recycling center and a methane gas project like one that fuels the metro in the northern city of Monterrey.

The plans could take years to come to fruition, however.

Nezahualcoyotl workers pushing bulldozers over animal carcasses from food markets, computer parts and plastic bottles say they are caught in the middle of a political fight.

Pilot projects at the dump include one that has 7 million worms chomping away at organic waste, including 14 tons a day of animal innards, to turn it into rich compost.

Another project uses a water filter to skim off some of the black sludge that bubbles off the trash heaps and distill it into yellowish water, used to wet dusty roads in the area.

The city wants to build infrastructure to capture 1.4 million tons a year of greenhouse gas belched by decomposing trash and burn it to run power stations, helping reduce smog.

“If they close it now it would be a step backward from the very small advances we’ve made so far,” said Judit Lopez, 39, who runs a plant turning old trees into sawdust for compost.