The authority aims to recycle half of household waste

The Department For Environment Food and Rural Affairs (Defra) has broken its �40m limit for backing waste schemes.

Two other bids have received Private Finance Initiative (PFI) grants from Defra, with �35m to going to Cambridgeshire and �34.5m to Southwark.

Greater Manchester's bid includes making fuel from waste bin compost.

Compost fuel

Greater Manchester Waste Disposal Authority (GMWDA) will be putting its waste management and recycling up for tender using the grant as an investment.

It aims to recycle every possible material from waste bins with the residue turned into a compost which could be dried and used to replace fossil fuel.

Tim Judson, GMWDA Director of Procurement, said "Refuse Derived Fuel" was currently used as an alternative fuel in cement kilns.

"What we are looking at is quite an extension using it as a replacement for coal," he said.

Mr Judson said it was possible that a power station using this fuel could be developed in Greater Manchester.

The authority currently sells electricity to the National Grid using methane from landfill sites.

A Defra spokesman said the record grant had been made to GMWDA because the region produces 5% of the UK's "solid waste."