The "pay-as-you-throw" trial was due to begin in April
No councils have signed up for the government's waste trial which would see households charged according to the rubbish they throw out, ministers say.
Five local authorities in England were needed to take part in the pilot "pay-as-you-throw" scheme, but none had applied by Wednesday's deadline.
The Department for Environment said the trial, enabled by the Climate Change Act, had been requested by councils.
Local authorities said they had not been told how the scheme would operate.
Environment Minister Jane Kennedy said the powers in the Climate Change Act that enabled up to five voluntary pilot schemes had been introduced at the request of councils and it was up to them whether they wanted to use them.
"No local authorities have expressed an interest in piloting a scheme at this time," she added.
Under the trial, due to begin in April, households which recycled the most rubbish and left the least in their bin would receive a rebate.
Those in the worst-performing homes would be charged for the rubbish they left, and it would be the money from those homes that would cover the costs of rewards for active recyclers.
But the financial incentives scheme has proved controversial.
The Conservative Party has labelled the penalties "bin taxes" and say they could lead to an increase in fly-tipping.
Caroline Spelman, shadow communities and local government secretary, said the plans were now "dead in the water" and signified a "major snub for Gordon Brown".
"The bin tax laws should now be repealed and taken off the statute book. These unpopular new taxes would harm the environment by fuelling fly-tipping and backyard burning, and hike tax bills for struggling families."
Richard Kemp, deputy chairman of the Local Government Association (LGA), said his organisation had lobbied for such waste incentive schemes because evidence from America and Europe showed they could boost recycling.
But he argued it was "unsurprising" no councils had come forward to take part in the pilots because ministers had not published rules for how they must operate.
"In the absence of any steer ahead of the deadline, local authorities were understandably reluctant," he added.
Responding to the LGA's claims, a spokeswoman for the Department for Environment said extensive draft guidance documents had been available to councils since June 2008.
The department had also sought views from local authorities last summer, she said, and waste reduction body Wrap had been available to provide support and guidance.
The government has been looking at a series of measures to meet EU landfill targets, which demand a 25% reduction on 1995 levels by 2010 and a 65% cut by 2020.