The Scottish government has admitted it may be forced to pull the plug on the UK’s first deposit return scheme by the end of this month, in a bombshell admission that threatens to leave DRS plans across the UK in tatters.

Scottish Green minister Lorna Slater this afternoon admitted that unless the UK government granted permission for the scheme to be given an exemption under internal market rules by the end of May, a decision would have to be made about the “viability” of the entire scheme.

Slater said that talks to try to salvage DRS were taking place at the “highest possible level”, adding: “By the end of May we will know one way or another.”

The news stunned retailers and logistics companies, who have been preparing for the launch of the scheme, which had already been put back until next April.

Slater’s admission came as she was confronted at a summit held by the Scottish Grocers’ Federation by its CEO Pete Cheema. He said he had been told by scheme administrator Circularity Scotland Ltd (CSL) that unless it received reassurances by the end of May that the UK government would drop its opposition to the rollout, amid fears about the impact on inflation, then it would cease to exist as an operation, despite suppliers having pumped tens of thousands into the body.

In response, Slater said: “We will have to make a proactive decision over whether the scheme is viable or not at the end of the month. Then we will know one way or another.”

Cheema told The Grocer it was “incredible” that the Scottish government had not communicated the threat to the industry, despite expecting retialers and producers to spend millions preparing for the rollout, despite the latest delay.

Only last week the government launched a new DRS implementation group, bringing together the industry, CSL and ministers to try to overcome the barriers to DRS. Cheema said there had been no mention at all that “it could all come crashing down” within days.

“The fact is that if I hadn’t confronted the minister today they wouldn’t have even mentioned it. Its incredible and systematic of the terrible handling of this issue that the industry has been subjected to,” he said.

Mark Brill, VP of sales and marketing at Tomra (pictured), said: “We have supplied hundreds of reverse vending machines and have hundreds more sitting in our warehouse yet now we are told that the scheme may not be available and that it could all come crashing down within a matter of days.”

Claudia Marshall, MD of RVM Systems, another major RVM provider, said she was “shocked” at the revelation.

The bombshell is the latest twist in the troubled history of DRS. Earlier this week, The Grocer revealed supermarkets were threatening to halt online deliveries of soft and alcoholic drinks, in what has been described as a “nuclear option” which could derail the scheme, over plans to make them responsible for online takeback.

The UK government faced calls at Rishi Sunak’s food summit this week to delay plans for DRS across the rest of the UK to allow the industry to concentrate on fighting soaring food prices