Packaging will determine some of what is sold at Wal-Mart

The retail giant says the scheme will start in 2008 and save the firm $3.4bn (�1.78bn) as well as "millions of pounds of trash reaching landfills".

The amount saved overall in the supply chain could be $10.98bn, Wal-Mart said.

UK supermarket Sainsbury's said earlier this month 500 of its own-brand goods would be in compostable packaging.

Unveiling the programme, Wal-Mart chief executive Lee Scott said packaging was an area "where consumers and suppliers come together and can have a real impact on both business efficiency and environmental stewardship".

From 2007, the retailer will give its buyers a "packaging scorecard", providing information on alternative forms of packaging, which will influence decisions on which products to stock.

Wal-Mart made the announcement at the end of the Clinton Global Initiative meeting in New York, where, on Thursday, Richard Branson committed the next 10 years of profits for Virgin - around $3bn - to fighting global warming.