Two private waste-management companies are pledging to go all the way to the European courts to halt Dublin City Council's attempt to reorganise the industry in the capital.

The council, which is the waste-management authority for Dublin's four local authority areas, last week said it was looking at taking over household rubbish collection or tendering for a private operator to provide the service.

Three private firms, NTR-owned Greenstar, Panda and CityBin, claim the move is an attempt to drive them out of the capital. They are competing with the council in collecting household waste in Dublin and say they offer extra services and cheaper rates than the authority.

Both Greenstar and Panda have confirmed that they are taking legal advice. They claim Dublin City Council is abusing its position as both a regulator and a competitor in the domestic waste collection market. Greenstar chief executive Steve Cowman said the case involved competition, constitutional and European issues. He added that it would set a dangerous precedent if the authority was allowed to go ahead with its proposals, as it would signal that the Republic's other authorities could do the same.

Panda general manager Brian McCabe said the company had invested heavily in the Dublin market and did not intend to withdraw from it. "If the need arises we will fight this in every court, Europe if need be," he warned.

Assistant Dublin city manager Matt Twomey did not comment directly on the companies' plans to take legal action. However, he said the authority had a statutory obligation to develop and implement a waste-management plan for the region. It did not believe that having multiple operators on the same routes was sustainable.

Mr Twomey said recommendations from State agency Forfás, the Competition Authority and Trinity economist Dr Francis O'Toole all supported holding a competitive tender process for a single contractor. This could ultimately lead to one collector for the entire Dublin market, or separate contractors for the four local authority areas.

Mr Twomey said the council was seeking submissions from interested parties and would consult them to establish what the best approach would be.