A lack of expertise and funding have hindered the drawing up of these regulations, which have technically prevented Thor Chemicals from disposing of the waste. The waste is now starting to seep into the soil and groundwater.

Environmental Affairs and Tourism Deputy Minister Rejoice Mabudafhasi acknowledged that the province was "sitting on a time bomb", saying "one heavy rainfall will push the contaminated waste into the Umgeni River".

This could also disrupt the province's water supply, as the Umgeni catchment area is a major water source. In addition, the cost of cleaning up the pollution could run into millions of rand.

Thor Chemicals has repeatedly refused to dispose of the waste, saying it is awaiting the implementation of the Davis Commission recommendations.

The commission set up in 1995 following the death of two workers due to mercury poisoning found that government was aware of the problem and failed to deal with it accordingly.

It called on government to draft mercury recycling standards, and requested that Thor Chemicals upgrade its plant to meet those standards before resuming the disposal of the waste.

The company subsequently used government's failure to deliver these regulation to back out of the clean-up.

In a letter to the ministry, the company indicated that the condition of its recycling plant had deteriorated, making it "impossible to upgrade it for the recycling as stipulated in phase three of the report". But Mabudafhasi issued a directive to Thor Chemicals in May this year instructing the UK company to get rid of the contaminated waste and pay for the clean-up operation in terms of the National Environmental Management Act.

Failing which, Mabudafhasi said, her department would go ahead with the clean-up operation and then sue Thor Chemicals for the costs, estimated to be about R60m.

Thor Chemicals agreed last month to fork out R24m for the first phase of the disposal, but the remaining costs would be covered by taxpayers.

The problem, though, is government has yet to present regulations under which Thor could start with the disposal.

Mabudafhasi said this week that the national treasury had approved about R10m for hiring UK consultants to draft the regulations, which were expected to be finalised by the end of November.

"The paperwork for the first phase of the clean-up operation is being sorted out now and experts are looking at which approach to use for the disposal," she said. "The clean-up should happen either in December or early January."

The hazardous waste has been sitting at the Cato Ridge factory since 1994 when government closed Thor Chemical's recovery plant.

Thor Chemicals' operation in SA was an "environmental disaster waiting to happen" from the start, according to a report released at last year's World Summit on Sustainable Development.

The company moved some of its operations from Margate in England to Cato Ridge in SA in the early 1980s, after being threatened with legal action in the UK over mercury pollution.

In SA, Thor imported mercury-containing wastes from the US, Brazil, Italy and the UK. It planned to develop a system to process waste products, but the waste accumulated beyond its capacity.