Plans to generate cash from trash, reduce waste and encourage more recycling in council blocks have been published by Mayor of London, Boris Johnson.

The draft proposals are intended to clean up the streets in time for the 2012 Olympics and cut council tax bills by reducing landfill waste by 2025, saving £90m per year in the process.

Mr Johnson said: “Some of London’s boroughs are taking pioneering strides forward to boost their recycling rates, however overall in London we are really lagging behind.

“I want to work with borough councils to harvest the massive economic potential coming from London’s waste both to save money off the city’s bills and to improve our environment.”

Proposals include a £5m city-wide campaign to promote recycling and specific funds to develop better recycling facilities in blocks of flats. At least £8.5m will go to support schemes like Freecycle and Freegle, where users exchange unwanted household items.

Estimates suggest 1.7m such items could be diverted from landfill each year.