The UK's new coalition Government has been accused of encouraging councils to snoop on householders, after it backed plans for incentives to homes who recycle the most rubbish.
The criticism comes as Communities secretary Eric Pickles today announces plans to scrap Labour's "meddling" bin tax.
The scheme, introduced under the Climate Change Act 2009, was dubbed "pay as you throw". It involved electronically tagging and weighing bins, and using the information to charge households who threw out the most non-recycled rubbish.
Critics accused Labour of encouraging fly-tipping. The then-opposition Tories last year condemned the proposals as "dead in the water", after no councils signed up for a Government trial.
Now Pickles is abandoning the scheme – but he won't be scrapping the chips.
Instead, the Government is backing a pilot scheme by Conservative-led Windsor and Maidenhead council to reward people for recycling with vouchers they can spend with local businesses. Although residents will have to opt in to the scheme, all council bins will be monitored using the existing chip system.
Civil liberties group BigBrotherWatch estimates that microchips are hidden in the bins of an estimated 2.6 million UK households.
The director of BigBrotherWatch, Alex Neale, says: "It’s good that bin taxes have been abandoned for now. They symbolised the worst of our Big Brother state - snooping on our private waste and charging us for the privilege.
"But these punitive and vindictive taxes were at least out in the open. Now exactly the same technology is being introduced, with the bribe of an 'incentive scheme'."
The UK must reduce the amount of waste it sends landfill by nearly two-thirds by 2020 to meet EU targets.