Ontario's controversial eco fee is gone -- as a direct cost consumers will have to bear.

The levy added to thousands of household products to fund a waste diversion program has been repealed, Ontario Environment Minister John Gerretsen announced Tuesday.

The program that funded the levy, however, remains in place and is under review, he said.

"Over the next 90 days we will review this waste diversion program to get it right. We want to make it fair to consumers while protecting our environment at the same time," he said.

It will cost the government an estimated $5 million over the next three months.

On July 1, a fee began to appear on receipts for products deemed potentially hazardous to the environment to help pay for recycling.

The eco fee was first introduced back in 2008. But its application to thousands of new products – including household cleaners and fire extinguishers -- began without public warning. It came on the same day the Harmonized Sales Tax was introduced, prompting consumer complaints.

On Monday, Canadian Tire announced it would stop charging the fee because the program was too confusing.

The Liberals gave an industry-led organization, Stewardship Ontario, the power to collect the fees.

"Stewardship Ontario could have done a better job of rolling out the changes, but we -- the ministry of the environment, the government, I as minister -- could have done a better job of helping them communicate those changes," Gerretsen said.

A hotline has been set up so that consumers can report any businesses who continue to charge the fee. The hotline is: 1 -800-889-9768.

Some consumers see the fees as a tax, but the fees did not go into the provincial government's general revenues.

Opposition attacks

Tim Hudak, leader of the Progressive Conservatives, was quick to make political hay.

"Today the truth finally caught up with Dalton McGuinty and forced him to temporarily back down on his eco tax grab just as he was forced to back down on his misguided sex-ed curriculum changes and his SuperCorp plans before that," he said.

Premier McGuinty backed off a sex-ed curriculum change that came under attack from social conservatives.

His government had been considering creating a so-called SuperCorp, which would gather major Ontario Crown assets such as the LCBO under one corporate umbrella before selling off a 20 per cent stake.

Hudak noted that the Liberals aren't killing the eco fee outright. The only way to do that would be to vote in a Tory government in the September 2011 provincial election, he said.

NDP environment critic Peter Tabuns said the government botched the handling of this file.

"It's one of the most chaotic approaches to managing a public issue that I've seen in a long time," said NDP environment critic Peter Tabuns.

"It was clear to me that the minister was not really certain where he was going, the province doesn't know where it's going. They have a huge problem on their hands."

The NDP believes that businesses should pay for the cost of the recycling family, not Ontario families, he said.

With a report from CTV Toronto's Janice Golding and files from The Canadian Press