Glass from Queenstown residents' recycling bins is going to landfill, Queenstown Lakes District Council admits.
Deputy Mayor and Infrastucture Team Leader Lyall Cocks said a communication glitch meant residents were not told what was happening.
Mr Cocks said the market for recycled mixed glass had dropped to the point where contractors couldn't sell it - so it was being used as landfill until a solution can be found.
The council is looking at ways to separate different coloured glass at the kerbside.
In Wanaka, part of the same council territory, glass is already separated and is being recycled.
Environmental groups will meet with the council next week to ask for reassurances that a solution will be found.