The government's target of 25% of household waste being recycled was beaten - at 26.7%.
Environment minister Ben Bradshaw said he would be summoning a number of local authorities to explain their poor performance.
They include Tower Hamlets LBC, which has the lowest recycling rate, of 8.9% and Liverpool City Council (10.7%).
The Local Government Association said local authorities had also worked hard to reduce the amount of waste sent to landfill.
Environment Board chair Paul Bettison said:
'There is still a lot to be done to recycle 40% of all waste by 2010. Some councils will find it difficult to reach ambitious targets and must have adequate funding and support to achieve such rates.
'Councils want to cut unnecessary packaging and reduce the amount of waste that can not be recycled. Ultimately we must make sure less waste is produced in the first place.'
Housing, planning & environment