The London evening freesheets face a potential ban from distribution in central London, after Westminster City Council accused the publishers of not doing enough to deal with the "mountain of waste" produced by discarded papers.
Associated has offered money to help with the clean-up and recycling of the discarded papers, but sources at the council said News International had not made a similar offer at the time of going to press.
A News International spokesman said talks were ongoing. "We have been working with Westminster Council since the launch of thelondonpaper and are in further negotiations to resolve current issues," she said.
Steve Auckland, the managing director of Associated's free newspaper division, said: "We have made a reasonable offer to help with the recycling."
He added that the company made a point of keeping its distribution to 360,000 to 400,000 to minimise wasted copies.
The firm's distribution contracts for Metro already include a contribution to cleaning costs.
Westminster Council has warned that, if negotiations with the publishers fail, it may be forced to invoke the Clean Neighbourhoods and Environment Act 2005 to ban or restrict the distribution of free literature in areas where they pollute the environment.
The council, which covers the West End, has already increased the number of recycling bins following the launch of the free evening newspapers in August, but claims it needs a further 300 bins and extra lorries and crews, at a cost of around £500,000 for the first two years.
Neighbouring councils are also concerned about the waste.
The Royal Borough of Kensington and Chelsea has already limited the number of distribution licences to 15 for each freesheet, down from about 40 each before the restrictions.
Camden Council, which extends south to Holborn, is currently collecting information on the "street cleaning, recycling and possible obstruction" caused by the free newspapers.
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