Environment Minister Peter Garrett has been forced to concede that a potential tax, levy or charge on plastic bags is under consideration.

Mr Garrett last week categorically ruled out a levy on plastic bags, however News Limited newspapers report such a possibility has been considered by Mr Garrett's department.

Government transcripts show that up to four different options are on the table for the phasing out of plastic bags, including charging a tax or levy, or instituting a total ban on the bags altogether.

A so called "checkout charge" is now a real possibility, including the potential to pay up to 25-cents for each bag used.

The plan however would be no major departure from policies in use throughout many retailers, including Borders Book Stores and some smaller supermarket chains.

In a bid to reduce the use of plastic bags, retailers have now taken it upon themselves to make the charge, with the funds often returned to charities or environmental groups.

Mr Garrett's spokesman says that a decision will be made in consultation with the states, and that the process will be consultative.

"The Minister will not speculate on what the outcomes of that discussion will be, but he's made it clear this Government will not support or introduce a Commonwealth levy on plastic bags," Mr Garrett's spokesman told the paper.

"We don't favour a Commonwealth tax or levy. We don't see the phase-out of plastic bags as a revenue-raising exercise for the Commonwealth. Working families want a sensible approach that delivers for them and for the environment."