The money -£12m each for Barnsley, Rotherham and Doncaster MBCs - is owed to a landfill company, Waste Recycling Group, formed as a result of contracting out waste disposal arrangements.
The company argues the£36m is the result of regulatory improvements that have had to be made to landfill sites in the wake of government legislation. The councils are disputing the figure and have been negotiating for more than two years in a bid to reduce the sum. A full agreement has still not been reached.
None of the councils would comment on the figures involved, but Barnsley said the money being discussed was 'nowhere near this figure [£12m]. The precise terms are confidential'.
The allegations followed a leak to the Yorkshire Post.