The Environment Agency will launch action to shut down the £24million plant in Newlands Park if it is not satisfied improvements have been made by March.
Area manager Steve Morley revealed the cut-off point at a fiery public meeting last night, which heard Biffa has spent £800,000 to reduce the stench.
Independent consultants MWH were commissioned to assess odours emanating from the plant. Experts made a series of recommendations to prevent smells from reaching homes.
Biffa's director of engineering and quality Dr John Casey said all the recommended work will have been completed by the end of January.
But disgruntled residents, who heckled Dr Casey throughout the 75-minute meeting, demanded to know when the Environment Agency would act if problems persisted.
Mr Morley told them: "We have to give the company the opportunity to do what they have said they are going to do."
Dr Casey said: "We take odour complaints very sincerely and I apologise. We have invested £800,000 and I will be relentless to make sure we improve."