The government has temporarily banned permits for new incinerator plants in England - which means a huge one planned for West Berkshire could be under threat.
The environment department will now consider how many plants are needed across the UK.
It comes after a top government lawyer warned a plan being explored to pause permits was "unlawful".
West Berkshire Council approved plans for the site last summer.
The application site is on land next to Reading Quarry at Berry’s Lane, Pingewood, and is just inside West Berkshire Council’s administrative area.
The incinerator - that could burn 150,000 tonnes of waste - has outraged people living nearby.
They say the site should be put in the middle of West Berkshire – not near them.
“If it is to serve West Berkshire it should be built in the middle of West Berkshire, so those causing the need understand the consequences,” said objector Carolyn Stewart..
The decision to instruct the Environment Agency to temporarily stop granting licences was made by junior Environment Minister Sir Mark Spencer.
Sir Mark Spencer took the decision to impose the temporary ban after fresh exchanges with the Environment Agency.
In a letter to its chief executive, Sir Mark said it was because he was "wary of committing" to giving more plants the go-ahead until officials had done more work "to consider whether there is a greater role for government to encourage investment in waste prevention", such as recycling.
The West Berkshire plant, with 50m-high chimneys, was described as an “exciting opportunity” for the district, bringing up to 50 jobs with it when it went through the planning process.
It is one of ten incinerators put on the back burner until the permit issue is resolved by the government.
