The result has been a dramatic increase in recycling rates, and that success has led to its expansion into New Jersey, Delaware and several New England states, and has prompted inquiries from Europe, Israel and Saudi Arabia.

"This is the most exciting thing that's come along for the last 15 or 20 years" in recycling, said Christine Knapp of the environmental advocacy group Citizens for Pennsylvania's Future.

RecycleBank has been operating in two Philadelphia neighbourhoods and some areas of suburban Philadelphia, covering about 5,000 homes, since January 2005, improving one of the nation's worst recycling records.

The programme attracts users by allowing people to accumulate all their glass, plastic, aluminium, cardboard and newspaper in one container rather than requiring separate bins. The single recycle bin is emptied by the local garbage collector.

In Chestnut Hill, a well-to-do Philadelphia neighbourhood, the proportion of recyclable waste actually being recycled has jumped to 50 percent from less than 10 percent since the programme began, said Ron Gonen, co-founder of RecycleBank.

More than 90 percent of households in the pilot-programme neighbourhood now recycle, up from less than 25 percent at the beginning of 2005.

Participating households earn "RecycleBank dollars" which are accumulated according to the weight of recycled trash.

The "dollars," up to US$400 a year per household, are donated by about 150 local businesses, which seek to generate goodwill with shoppers and entice them with discounts of 10 or 20 percent.

"It's the most brilliant idea," said Ellen Hass, a Chestnut Hill resident. "Fifty percent of everything is recycled because it can be recycled."

HOW TO CUT THE TRASH BILL

The city of Philadelphia benefits from the reduced amount of rubbish it must dispose of, and it pays half of the savings to RecycleBank.

Even so, Philadelphia still has the second-lowest recycling rate, at about 5 percent, among US cities with more than 1 million people.

Gonen says Philadelphia could cut its rubbish disposal bill by at least US$17 million a year if it met its own recycling goal of 35 percent

But the city disputes that savings figure and has resisted taking RecycleBank citywide because it says the programme would add to the city's costs by US$12 million to US$18 million a year.

The city is in talks with RecycleBank to extend the programme to an additional 7,600 households so that RecycleBank can show it can overcome "operational inefficiencies", said Carlton Williams, deputy commissioner of the Streets Department.

The national recycling rate is now in the low 20 percent range, down from its peak of around 25 percent in the mid-1990s, and sharply lower than rates of around 60 percent in Germany and Scandinavia.

RecycleBank has prompted a number of other eastern cities to sign up. In New England, about 100,000 homes will begin dumping recyclables in RecycleBank containers this fall in a partnership with Casella Waste Systems, a waste-management company based in Rutland, Vermont.

"This is one of the most innovative programs to enhance recycling that we've seen in a long time," said chief executive John Casella, whose employees will collect the recyclables and sort them for sale to various markets.

The partnership makes business sense for Casella because it will boost the volume of materials processed by the company's recycling plants, and because it can make more money by selling recyclable materials, many of which are currently in strong demand, Casella said.