Local government waste contractor Biffa is reportedly facing a takeover by the banks, because of crippling debts.

According to reports yesterday in The Sunday Times, the company is set to be taken over by HSBC after struggling to sort out its finances.

Three investment firms bought Biffa in 2008 – Montagu, Global Infrastructure Partners and the private equity arm of Halifax.

The company makes more than 2.5m collections a week across the country and employs 2,500 staff.

In August, banks took an 80% stake in council outsourcing firm Mouchel after it was restructured.

A Biffa spokesman said: ‘Biffa is a profitable, cash generative business, which is performing in line with its plans.

‘The company is undertaking a well-managed, planning restructuring process, working with its lenders to reduce the debt on the business.'