The waste tip is licensed until March next year

The Cilgwyn site at Carmel near Caernarfon, deals with waste from thousands of homes in the Arfon and Dwyfor areas.

A spokesman for the agency said the waste company has six months to appeal against the refusal.

It has been told of the decision but is waiting for a formal notice to be issued.

It is believed the decision relates to concerns that the site is not lined, which means there is a danger of polluted water seeping underground.

Landfill sites have recently become the target for new European legislation.

The site, which is part of an old slate quarry, has been used as a refuse site for 30 years, and receives 60,000 tonnes of rubbish a year.

"We have been told verbally that our two applications have been rejected," said Medwyn Williams, from the operators Cwmni Gwastraff Mon-Arfon Cyf.

"But until we get something in writing we won't know why."

Gwynedd councillor Tomos Evans said he was concerned if the licence was refused but added that the company could still appeal against the decision.

An Environment Agency spokesman said if the company appealed it would still be able to continue operating under its current licence until the issue had been resolved.