Scheme faced hostile opposition from businesses and MSPs

Scotland’s controversial deposit returns scheme is set to be dropped as ministers believe it to be unviable.

Due to start in August, the scheme would place a fee on single use drinks bottles and cans so to encourage reuse.

The scheme has faced stiff opposition from manufacturers and distillers, especially small businesses, and needs Westminster to grant an exemption to the Internal Market Act to make it work.

Lorna Slater, minister for the circular economy, said if an exemption from the Internal Markets Act was not confirmed then the Scottish government would have to decide on its future.

The move would add 20p onto each single use container, a significant sum which retailers say would hit sales.

David Harris, chief executive of Circularity Scotland, which was set up to administer the scheme, said: "We have written to the prime minister and first minister to stress the growing urgency around this and make it clear that many millions of pounds and hundreds of jobs are at risk if there is further delay.

"Business and industry have come together to make this a reality, without any cost to the taxpayer.

"However, we now find ourselves caught in a policy vacuum which calls the very future of delivering successful deposit return schemes in the UK into question."

Ms Slater, Scottish Green co-leader, said she would know "one way or the other" by the end of the month.