Local plogger Antonia Wood, of Ravensbourne, said she noticed the bins has been removed from Vogel St last week.
When she called the Dunedin City Council they told her the bins were removed because "people were using them too much", she said.
The council alleged businesses in the area were putting their rubbish into the bins.
"They can’t prove that really, and a lot of businesses we talked to in the area said they had witnessed members of the public drive up and dump their personal rubbish in them."
She said while the public and businesses using the bins as their personal disposal units was not good, removing the bins would not stop illegal dumping.
She added that changes in the rubbish collection system in Dunedin also did away with inner-city rubbish collection, leaving businesses and residents to sort it out for themselves.
"This is a mixed commercial and residential area — some people will be unable, or unwilling, to drive their rubbish to the dump. What happens after that? I guess people start loading up the rubbish bins on the street."
"This has been an ongoing problem for the last six months and has meant all recycling collected from these bins has had to go to landfill due to the very high levels of contamination," the spokesman said.
As of Wednesday, four new bins were installed, which had tapered tops and no recycling bin attached.
"There are a number of private service providers already offering waste collection services in the Vogel Street area — the rates we charge for CBD properties and businesses do not include a charge for DCC rubbish collection services," the spokesman said.
