A COMPANY accused of complicity in the running of Israel's illegal settlements has dropped out of the bidding process for multi-billion pound waste contracts.

French multinational Veolia was hoping to scoop two deals worth £3-4 billion to oversee rubbish disposal for the next 25 to 35 years in Waltham Forest and adjacent boroughs under the remit of the The North London Waste Authority (NLWA).

But the NLWA has announced today that Veolia has now withdrawn from the tendering process.

It comes after a storm of protests from campaigners over Veolia's involvement in projects such as the Jerusalem Light Rail (JLR).

The UN Human Rights Council has described the railway as being in "clear violation of international law" because it links parts of Israel with its illegal settlements in the West Bank.

Veolia denies supporting illegal activity and said it had withdrawn from the project, but one UN official said it still owns approximately 80 per cent of Connex Jerusalem, which is the company that operates the trains.

The official, Richard Falk, the UN's human rights special rapporteur for the Palestinian territories, also warned that Waltham Forest and other councils could break international law if they handed over public money to the firm.

The Israeli government disputes the UN's claim that it is in violation of international law and that the settlements are illegal.

A spokesman for the NLWA said: "Veolia had been shortlisted for both contracts and, in withdrawing, Veolia has confirmed that the decision has no bearing on the quality and integrity of the projects.

"NLWA is now to pursue dialogue on final tenders with only FCC/Skanska for its waste services contract, which is to provide sustainable waste disposal services for north London in the long term, and with only E.On/Wheelabrator for its fuel use contract."

Cllr Clyde Loakes, chair of NLWA and a Waltham Forest cabinet member, said he was "disappointed" that Veolia had dropped out because the tendering process was now no longer competitive.

Ellie Merton of the Waltham Forest Palestine Solidarity Campaign, said: "I'm overwhelmingly delighted - this has made my Christmas.

"We were so concerned about this on so many levels, but from a human rights perspective alone it was diabolical that Veolia could even be considered for such massive contracts.

"There's no doubt that the campaign has had an impact on this. We've had so many groups, organisations and concerned residents getting involved."

Earlier this year campaigners claimed Veolia was on the shortlist to take over the council's street cleansing and grounds maintenance contract in Waltham Forest.

The council said it could not comment on the shortlist but campaigners said Cllr Loakes then let slip Veolia was no longer in contention.

Veolia refused to comment on the reasons why it had withdrawn from the bidding process.