The YEP understands that the site of a notorious car boot sale in Cross Green is the favoured option for a £127m plant to burn hundreds of thousands of tonnes of refuse a year.

The other three sites are the former Skelton Grange power station, Knostrop sewage works, and land next to the sewage works. All three are situated within a mile of Cross Green in the east of the city.

Coun Steve Smith, Leeds City Council executive member for environmental services, said the issue would be discussed by the executive board on September 11.

"We have not made a decision yet about which technology will be used to deal with the waste," he said. "We're hoping to select the best option by 2010."

He said they had examined more then 100 sites across the city.

Of the four on the shortlist he said: "We don't prefer any one of these sites over another."

"We are not committed to an incinerator. What we are committed to is the best environmental and health solution to the people in Leeds."

The incinerator plan has already led to the Green party quitting the ruling three-way alliance with the Lib Dems and the Conservatives in May.

Greens leader Coun David Blackburn said: "The solution is not incineration or recycling, but waste reduction."

Coun Judith Blake, Labour's spokesperson for city development, said: "The impact on the immediate environment is going to be immense. There are other processes they could go down to support the waste programme like increasing recycling, and educating people."

The Cross Green car boot sale in Pontefract Lane is notorious for rogue traders selling counterfeit and stolen goods, with 11 traders arrested and £400,000 worth of goods seized there on Sunday, as reported in the YEP.

Some say turning it into an incinerator would be one way of cleaning up the car boot sale for good – and a way of increasing the authority's revenue.

One trader, who did not wish to be named, said: "The new East Leeds road is being built near the industrial estate and the council will eventually get rid of it altogether."

Yorkshire's only other incinerators are in Sheffield and Huddersfield.

Opened in 2002, the Kirklees plant cost £35m, burns 136,000 tonnes of rubbish a year and generates enough electricity to power 10,000 homes.