As many as 1.5 million cars are being scrapped illegally in Britain every year, presenting a major environmental hazard, the BBC has learned.
Thousands of tonnes of toxic waste are being created by drivers who fail to dispose of their vehicles in the way demanded by the European Union.
Opposition parties say the government must act - or risk being taken to court by the European Commission.
The government says it is working to tighten procedures.
In 2003, the European Union introduced legislation requiring all cars coming off the roads to be taken to an approved site, cleaned of pollutants, and the owner issued with a certificate of destruction.
"It's been British law now for the best part of three years, but the arrangements simply aren't working"
According to the Department for Trade and Industry, two million cars were scrapped every year, but by the end of June this year only 250,000 had received a certificate of destruction.
The government said it was wrong to assume all vehicles which did not have the certificate were being illegally disposed of and officials were actively working to tighten procedures.
But industry experts said the situation meant 18,000 tonnes of vehicle fluids and the same amount of batteries could be being dumped or poured down the drain every year.
The Liberal Democrat MEP for North West England, Chris Davis, said the situation was starting to get out of control: "We have some really useful European environment legislation, designed to ensure that we deal with this huge mountain of scrap cars in a responsible manner.
"It's been British law now for the best part of three years, but the arrangements simply aren't working.
"Either the government has got to join departments together and get these changes made, or we're going to have to ask the European Commission to take Britain to court and make sure that we're protecting our environment properly."
Legitimate operators such as Jeff Bridges were struggling to compete with the illegal car-breakers.
"You've only got to pick up the local paper, turn to the back page and there will be dozens of adverts with mobile numbers to remove your vehicles; and we can't compete with that," he said.
"We obviously have overheads, we have legal obligations to fulfil, whereas they are just one man with a lorry who will go along and take the vehicle away - untraceable, unprosecutable."
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