BEIRUT (Reuters) - Lebanon cancelled a plan to export its rubbish to Russia on Friday (Feb 19), a government agency said, sending Beirut's six-month garbage crisis back to square one as mountains of trash choke the city's air and streets.

Lebanese authorities shut the main landfill site for garbage from the capital in July, without providing an alternative.

Frustrated protesters point the finger at Lebanon's paralysed political system, made worse because of sectarian tension that has increased with Syria's civil war next door. The government has not passed a budget since 2005 and has been without a president for over a year and a half.

The British firm chosen to export the rubbish to Russia for disposal, Chinook Urban Mining, failed to obtain documents proving Russia had agreed to accept the waste by Friday's deadline, annulling the deal, government agency the Council for Reconstruction and Development (CDR) said.

It said this meant the Lebanese government could now claim US$2.5 million (S$3.5 million) from Chinook which the waste management firm put up as a guarantee it would get the required permissions.

The CDR said the company apologised for not being able to provide the documents. Chinook declined to comment.

"The CDR will now take the necessary administrative steps, including informing (Chinook) to consider the preliminary approval cancelled, and that the financial guarantee, which the company offered as a guarantee they would secure the required documents, will be claimed," the CDR said in a statement.

Untreated, unmanaged rubbish threatens the water supply and people continue to burn garbage - despite a government ban - filling the air with foul smoke that contains dangerous levels of pollutants and carcinogens.

At a National Dialogue session on Thursday, Prime Minister Tammam Salam said if the export plan fell through, he would ask politicians to reconsider the original landfill plan, and also said he had asked for an incineration plan to be looked into.