Councils are to be offered an estimated £100m to reinstate weekly household rubbish collections cut as part of a drive to encourage more recycling.

The move, which is likely to infuriate environmental campaigners, follows widespread complaints that fortnightly collections have led to a rise in fly-tipping and concerns over vermin and hygiene.

The scheme, which government officials will be announcing soon, the Daily Telegraph reported, is expected to be included in a review of waste disposal to be published by the Department for Environment, Food and Rural Affairs (Defra).

It is said to mirror a similar plan introduced this year to encourage local authorities to freeze council tax. A Defra spokesman confirmed the review will be published shortly, but described the Telegraph report as "speculation".

"We won't comment on speculation about the final detail of the waste review. It is important that the right policies are in place to help communities and businesses reduce waste and maximise recovery of materials through recycling."

The government has for some time been urging councils to abandon fortnightly refuse collections despite claims it would lead to 1m extra tonnes of recyclable material being sent to landfill each year and would jeopardise the UK's ability to meet EU environmental targets.

More than 170 English councils have fortnightly collections of "black bag" rubbish. Evidence shows less frequent collections encourage people to recycle more in order to avoid over-filling their bins.

An analysis by Defra's waste quango Wrap, has suggested that if weekly collections were reintroduced, the amount of paper, plastic and cans put out for recycling could drop by 30-46kg per household per annum.

But earlier this year, Eric Pickles, the local government secretary, warned councils operating fortnightly collections that they risked creating an "army of angry middle England" if they did not give them something back for paying their council taxes.

In January, Pickles told a local government conference: "We need to remember that rubbish is the most visible and most frontline service of all in return for what they now pay – the best part of £120 a month in council tax."