Supermarkets, retailers and major drinks brands are set to pay tens of millions of pounds more towards recycling their used packaging under the government’s new waste strategy expected to be published this month, the Guardian understands.

Supermarkets and other major producers of packaging waste currently pay a small fraction of the cost of collecting and recycling the 11m tonnes of packaging waste produced in the UK.

Ministers are considering several options to improve recycling, stop abuses to the export market in plastic packaging and make companies pay more towards collecting and recycling their own waste.

Sources with knowledge of the new waste strategy, which is due to be published in a few weeks, said it contained plans to significantly increase contributions from retailers and producers from an average of about £70m a year to between £500m and £1bn a year.

Plastic bottles in a recycling bank in Wales. Photograph: Alamy

In 2017 local authorities spent £700m on collecting and sorting recycling, compared with £73m from major businesses including leading supermarket chains and retailers, according to the National Audit Office.

There are also plans to increase the number of companies who have to contribute, from 7,002 at the moment, to include smaller producers.

Any new system must take into account the EU circular economy package, which the British government has signed and which should roll over into UK law after Brexit. It requires food and drink companies and other retailers to cover the net costs of household recycling collections by local authorities, bringing the UK in line with other European countries such as Germany, Belgium and the Netherlands.

Abuses and corruption go largely undetected in the current system while many large companies dodge paying entirely. The structure encourages the export of plastic waste to countries where it can end up leaking into the ocean or going to landfill rather than contributing to investment in UK reprocessing.

Earlier this year the Guardian reported the plastics recycling industry was under investigation for suspected widespread abuse and fraud within the export system.

Two-thirds of UK plastic packaging waste is exported rather than reprocessed in the UK, by an export market the National Audit Office has condemned as “a comfortable way for government to meet targets without facing up to the underlying recycling issues”.

Since China banned the import of plastic waste, the UK has been chasing other markets in Malaysia, Vietnam and Thailand, but these countries are also imposing restrictions due to the stockpiling of waste. Exports of UK plastic waste to Turkey are soaring as Britain struggles to find outlets for its packaging waste.

A block of compressed plastic bottles at a plastic waste centre on the outskirts of Beijing. Photograph: Fred Dufour/AFP/Getty Images

British reprocessers have consistently called for an end to the incentive to export waste, and for investment instead to boost domestic recycling and reprocessing.

Phil Conran, the chair of the advisory committee on packaging, which makes recommendations to government, said: “I think those retailers and manufacturers that are engaging in all of this do accept that costs will significantly increase. Many of them are used to much higher costs in other member states anyway, so they know it is inevitable.

“The [current] system … has never been about long-term sustainability, just about meeting each year’s [recycling] targets at lowest cost.”

Nestle UK, which sits on the advisory committee on packaging, said it had been an active participant in the discussions around reforms to the current producer responsibility system.

“We support any changes that will bring about a well-functioning, consistent waste collection and recycling scheme, and particularly one that will help to stimulate a circular economy for packaging within the UK,” it said in a statement.

Ministers are likely to put forward up to four options to extend producer responsibility payments in the new waste strategy by the end of the year. These vary from retailers and producers directly funding local authorities’ recycling collections to a levy that would trickle down to local councils.

Lee Marshall, of the local authority recycling advisory committee (Larac), said some form of direct funding was preferred. “If there is a ‘trickle down’ system, there is always the danger of how much of it in reality will trickle down to local authorities.”

He said he understood the changes would be huge for producers and retailers, but until now taxpayers had paid for 90% of collecting and sorting household waste for recycling, while the businesses who put the packaging on to the market contributed 10% of the cost.

“We realise that, for producers in the UK, the idea of paying for the full net cost of collections is a big change. We do sympathise but we would argue that they have been getting away with it for too long,” said Marshall.

A spokeswoman for the Department for Environment, Food and Rural Affairs said it was committed to reforming the current producer responsibility scheme.

She said: “While recycling rates have increased significantly, we want to ensure producers take greater responsibility for the environmental impact of their products, starting with packaging.”