It is the first council to achieve this status for waste services. Inspectors also found that it had promising prospects for improvement.
The service diverts 58% of municipal waste away from landfill, through initiatives such as a materials recycling facility; a waste-to-energy plant; a composting site and new household waste sites.
It has also segregated the collection of recyclables.
The net cost of the service for 2001/2002 was 17.1 million, including income of 6 million.
The council aims to achieve its statutory recycling targets and its share of the European target for diversion of waste from landfill.
Kirklees has five household waste and recycling centres, and 132 bring sites.
Diane Neale, the commission's northern region inspector, said that Kirklees' service, “combines many excellent features and has a track record of developing, managing, and delivering ambitious projects”.
But the inspectors criticised a high missed bin rate and a lack of co-ordination in tackling fly-tipping and litter reduction.
David Payne, the cabinet member for environment and transportation, said: “This top rating couldn't have been achieved with the co-operation of householders, the hard work of employees, the input from our partner SITA/Kirklees and the efforts of elected members who have sometimes taken difficult decisions in the interests of the service and its customers.”
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