Just days after SKM Recycling stopped accepting waste from more than 30 local councils, discussions are ramping up to prevent the materials from going to landfill.

"I have been having discussions with colleagues throughout the weekend, and I will be talking to colleagues again this afternoon," Premier Daniel Andrews said on Sunday.

"We are working with the MAV (Municipal Association of Victoria), we are working with affected councils, we are speaking with many players within the industry."

The state government announced a partial solution on Friday where other players would process up to 40 per cent of materials destined for landfill in the short term.

But the alternative operators were not revealed, or how much the deal would cost.

When asked if Mr Andrews would freeze the landfill levy to prevent councils bearing additional costs, or tap into its funds estimated to be about $500 million, he replied:

"The point that you made is not lost on me or colleagues."

Opposition leader Michael O'Brien said the landfill levy pool of cash should be used.

"Daniel Andrews is sitting on a stockpile of over half a billion dollars of taxpayers' money. Daniel Andrews has let the recycling system of Victoria completely fail," he said.

SKM has had a series of fires at its sites, leading to a crackdown by the environmental watchdog for licence breaches, including stockpiling material.

"They can't in fact take any more without breaching their permits with Environment Protection Authority. The system is fully loaded," SKM's representative Rob Spence told ABC radio on Friday.

The EPA said there are no restrictions on SKM taking waste at its Coolaroo, Laverton North, Geelong and Hallam site.

But its subsidiary Glass Recovery Services isn't allowed to take combustible waste.

This doesn't aid SKM as glass waste arrives co-mingled with other types of waste.

SKM has faced court in Victoria and Queensland this week when creditors owed millions of dollars sought that the business be wound up.

A Melbourne court gave SKM more time to repay its debts, which the company hopes to achieve within a week while securing a deal with a potential new owner.

Australian Associated Press