Urgent talks will be held to solve a dustbins collection row and prevent rubbish piling up in the streets.

Council leaders say they will act quickly after refuse collector Onyx walked out on its contract with Arun District Council, saying it was losing money.

The council has until July 1, when Onyx collections will stop, to make alternative arrangements for street collection and cleaning.

Arun services director Colin Rogers said: "It is time to roll up our sleeves and make this our top priority."

Onyx's decision to pull out of the contract affects thousands of homes in the Littlehampton, Arundel and Bognor areas.

It leaves the council with two options - to bring the service back in-house or call in a private contractor under emergency procedures.

Arun last ran the service itself 15 years ago before Government legislation compelled local authorities to put services out to tender.

Mr Rogers admitted it would be "difficult" to find another contractor to take over in such a short space of time and said if extra costs were incurred by taking on a new firm, the council could seek legal advice.

He said: "I think it is going to be very difficult in that time frame and I will be encouraging our councillors to hold urgent talks so a decision about the way forward is taken as quickly as possible."

The GMB union, which represents most of the refuse collectors, said the contract between Arun District Council and Onyx, which still has eight years to run, had been in crisis for several months.

Spokesman Gary Smith said: "We have said the contract has been in trouble for a long time and predicted this would occur.

"Now, the local authority needs to do what is right by the workforce and this is an uncertain time for them. We think the only course of action, and the most viable, is to return the service in-house.

"The Brighton and Hove experience has shown it can work."

Arun today sought to reassure residents concerned their bins would not be emptied by saying a regular refuse collection would still continue despite Onyx's decision.

The council said it was looking at providing an alternative collection service and said it would be business as usual until alternative measures were put in place.

Last November, members of the union successfully won a 20 per cent pay rise from Onyx when refuse collectors held a one-day strike and threatened further action.