A recycling company is to challenge a decision by Banbridge District Council not to renew its contract and to bring recycling services in-house.
Bryson Recycling argues that the council's decision was flawed and against the best interests of Banbridge residents.
The company has provided recycling services in Banbridge for 10 years. Its current contract expires in March 2012.
Banbridge District Council has denied the allegations.
When informed of the council's decision, taken in February, Bryson Recycling commissioned a review from a waste management consultancy firm.
They now believe they have sufficient evidence to show that the decision making process was flawed, and have begun judicial review proceedings.
Jobs at risk
Eric Randall, director of Bryson Recycling, said: "We believe that the council's decision has been taken against the best interests of the ratepayers and residents of Banbridge and does not represent the best value option for the borough in terms of cost, the impact on local jobs, or waste management and recycling effectiveness."
Bryson argue that according to their review, rather than saving the council £3m, as was forecast in the original decision, the proposed changes would in fact cost it £600,000 over the same period.
They also claim that whilst the council will safeguard three jobs with the changes, the jobs of 35 Bryson Recycling employees will be put at risk.
However, Banbridge District Council said it "categorically refutes the allegations being made".
"However, as Bryson Recycling has embarked on a formal legal process in relation to this issue, it would not be appropriate to make any further specific comment at this time."
They said that comments on the detail of Bryson Recycling's review would be responded to in due time by the council's officers and legal advisors.