It comes as the state government has committed another $10 million loan to help resume waste processing across Victoria.

Hindmarsh Shire chief executive Greg Wood said the $6.6 million the government provided to the council, along with Yarriambiack, West Wimmera and 30 other councils across Victoria earlier this month, was not enough to open up alternative recycling markets.

He said recycling had been stockpiling at Wimmera Mallee Waste's Rainbow facility for the past few weeks since the company SKM recycling collapsed. That facility is now at capacity.

"We've held out as long as possible in terms of cost," he said.

"No-one in Victoria is prepared to take waste. Places interstate are prepared to look at it but only for at least three times the cost (SKM was offering). Even though the state government provided money, that won't go to funding new recycling markets in a sustainable way.

"We've heard nothing about medium- to long-term solutions. Certainly none that have been announced."

Mr Wood urged the government to use more of the money it received from its landfill levy to help councils find recycling solutions.

"Every time someone puts money into landfill they collect a levy per tonne, and over the last few years they have collected $500 million. That's where they're getting the $6.6 million for this short-term fix from," he said.

"One of the most disappointing parts of this whole saga is a lot of work has been put in over 20 or 30 years to get the community to be diligent at recycling, and we don't want people to get into the habit of throwing anything into any bin again.

"Eventually we hope to get them to switch back to recycling. It is possible some other solution might come up in the short term, though I don't know what it would be."

Mr Wood said Hindmarsh Shire collected "a few thousand" recycling bins in the municipality every fortnight.

Yarriambiack Shire chief executive Jessie Holmes agreed the state government could help finance councils' search for local recycling solutions. She said recycled waste from the municipality would go to Dooen landfill from this week.

"Our contract is the same as Hindmarsh," she said.

"Ultimately we are heavily reliant on the state government providing alternative markets for our recycling products to be distributed through.

"Our waste and resource recovery group is looking for any options we can to recycle and create our own markets for those products - regional processing facilities, potentially even manufacturing plants or waste-to-energy - we would support anything that brings economic development and jobs to the region and means we can deal with waste here so we don't have transport costs."

Related: Does the Wimmera need its own recycling processing facility?

The three councils' kerbside recycling contract, through Wimmera Mallee Waste, saw recycled materials being sent to SKM Recycling for processing in Geelong and Coolaroo in Melbourne.

On Tuesday, the state government gave SKM's receivers KordaMentha help clear waste stockpiles and fund essential maintenance work to get recycling plants back up and running.

A spokeswoman said stockpile clearing at on Melbourne site would begin within the week and some processing within five weeks.

"Further work is required to bring the Hallam, Geelong and Coolaroo facilities back on line," she said.

An inquiry into whether the state government properly responded to the recycling saga, including China's decision to restrict the import of waste in 2018, is due to hand down its interim report on Thursday.

The government is also developing a circular economy policy and action plan, on how it can minimise and reuse waste, for release later this year.

The Mail-Times has contacted Wimmera Mallee Waste and West Wimmera Shire chief executive David Leahy.

While you're with us, you can now receive updates straight to your inbox twice weekly from the Wimmera Mail-Times. To make sure you're up-to-date with all the news from across the Wimmera, sign up below.