European recycling group Renewi is effectively paying waste management giant Biffa £125million to take its local authority waste treatment business off its hands.

It said that its UK Municipal division, which has five “highly bespoke”, long dated contracts with local authorities in England and Scotland, was a “legacy business” that did not fit with the rest of the group.

Renewi said that the contracts were entered into 10 years ago and were either break even or “structurally loss…