Plans for a giant incinerator that could burn most of the rubbish produced in Leicestershire homes were unveiled today.

The incinerator will generate enough renewable electricity to power 40,000 properties.

Waste management firm Biffa wants to build the £200m complex next to the M1, near Shepshed.

The plant, at the firm's Newhurst Quarry site, would be able to incinerate up to 180,000 tonnes of domestic rubbish each year that would otherwise be sent to tips.

It would also burn a small proportion – 120,000 tonnes – of the waste produced by firms.

Biffa said that the process would produce energy for up to 42,000 properties.

The plans have been criticised by green groups, who are concerned about the environmental impact of incineration.

There are also concerns about the effect on people's health of the emissions.

A spokesman for Biffa said the plant would "incorporate all the required environmental treatment and air pollution control systems to ensure the emissions are well within legal limits.

"Ash from the combustion process will be recycled as aggregates for the building and construction industry."

Biffa chief executive officer Andre Horbach added: "Waste should be seen as a resource. Our view is that it should be recycled wherever possible and the remaining material used to generate energy."

Leicestershire's homes create about 330,000 tonnes of waste each year.

About 50% is recycled and the rest, about 165,000 tonnes, is sent to landfill sites.

While the incinerator would have the capacity to burn more than that amount, a small proportion of the waste would not be able to be incinerated and would have to be sent to tips.

Keith Kondakor, of Leicestershire Friends of the Earth, said: "The idea of burning rubbish to make steam to generate electricity has been around since Victorian times.

"It is a very inefficient way of producing power. On top of that, it will take at least five years to build this plant and by that time it will be obsolete.

"Leicestershire's recycling rate is 52 per cent now and will be around 60 per cent in 2015. This incinerator will not be needed."

Shepshed county councillor Christine Radford said the plan would concern the town's residents.

She said: "I shall reserve judgement until I know more about the detail of the proposal, but incineration has caused problems in the past with the level of dioxins given off from the process.

"Clearly, we need to be completely satisfied we are not creating a problem for the future inhabitants of Shepshed.

"No doubt standards exist, but to be effective they need to be properly policed."

Biffa is one of three companies shortlisted for an £86m Leicestershire County Council contract to dispose of the county's rubbish between 2015 and 2040.

It is the first to release details of how it would manage the waste.

Proposals by rivals United Utilities/John Laing Investments and Veolia have not yet been made public.

A county council spokeswoman said: "We are open to all technologies.

"No decision has been made on the technology or location of a waste facility.

"The county council has made two sites available to bidders. One is at the Interlink Business Park, in Bardon, and the other is its current waste facility at Whetstone. As well as these sites, companies are free to propose their own sites for the development of a major waste treatment facility."

She added: "There will always be a proportion of residual waste that may have to be disposed of in landfill sites, but along with reducing, recycling and composting our waste, the procurement of a new waste treatment facility is part of the way we will reduce the amount that is sent to landfill."

The county council will announce the winner of the contract next year.

However, Biffa said that even if it did not secure the deal it would still look to build the plant .