The Green Party has pulled out of Leeds Council's ruling coalition which it fears could back plans for a waste incinerator in the city.
The Green group said it was against an incinerator
The coalition had been made up of 21 Conservatives, 24 Liberal Democrats and three Greens.
The Greens have not yet decided whether to do a deal with Labour, which has 43 seats, to form a new majority group.
As part of a review of council waste policy the authority is considering burning rubbish instead of burying it.
Green Party leaders said they could not be part of that decision.
In last week's local elections, the Labour group gained a further three seats while the Liberal Democrats lost one seat and the Conservatives lost two.
Coun David Blackburn, leader of the Green group, said: "At the start of this new municipal year it is obvious that decisions have to come to a head on incineration and we can not support a policy that takes us down the route of building an incinerator.
"There is much that this administration has done in the last three years to be proud of and I was privileged enough to be part of that.
"There, however, comes a point where we have to stand on our principles and we have reached that time."
A public consultation held last year found most residents were in favour of an "energy from waste" plant - not an incinerator - to destroy rubbish which could not be recycled and would previously have been sent to landfill.
An energy from waste plant involves burning waste under strict conditions to supply power to the national grid and heat houses and businesses.
City council and Tory group leader Andrew Carter said the plans were still at a very early stage.
He said: "We have certainly not got as far as backing one particular waste disposal method at all - it's still very early days. I'm not a fan of incinerators and I'm still keen to see what other options there are.
"For the rest, it's still business as usual for us and between the Conservatives and the Liberal Democrats we will continue running the council as a coalition."
The council buried 79% of the household waste it collected in 2005/6.
Under new legislation, by 2020, the authority faces paying an estimated £217m in penalties if it does not take action to meet targets, it said.