More than a third of residents and more than half of businesses ignored fixed penalty notices (FPN) issued against them last year.
It comes after the cost of fines increased fourfold from £50 and means that city coffers are missing out on £136,000.
The number of fines dished out for flytipping has doubled in recent years, but more people than ever before are refusing to stump up the money.
Environment leaders have now called on prosecutors to do more to “chase” individuals and firms slapped with FPN for dumping furniture, mattresses and other large items.
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But there are concerns they could be asked by the council to crack down on “innocent” flytippers at the lower end of the scale.
Sandy and Carol Wood have been referred to the procurator fiscal for non-payment of a £200 flytipping fine.
The couple left a cardboard box next to an overflowing recycling bin in November and were then tracked down to their Davidson’s Mains home.
Mrs Wood, 57, branded the council’s approach “heavy-handed” and called for a much clearer definition of what exactly constitutes “flytipping”.
She said: “If I had thrown a box out of a car window, I would expect to be fined – not for leaving it at a recycling facility which was not fit for purpose.”
Only 177 of 500 individuals hit with a domestic notice in 2014-15 have paid – marking a compliance rate of just over 35 per cent. Evasion among trade flytippers has also jumped, with just 505 of 861 fined offenders paying charges.
Councillor Lesley Hinds, the city’s environment leader, said: “I believe that harsher fines act as a greater deterrent and help to encourage more people to dispose of waste responsibly. However, it is important that notices issued are enforced rigorously and that is why we are urging the procurator fiscal to ensure that they follow up on cases of non-payment.”
Under current laws, it is the responsibility of councils to pursue those who fail to pay fines. However, problem cases can also be referred to the procurator fiscal and made subject to prosecution.
Allan Jackson, Conservative councillor for the Forth ward, said he was concerned that the “naive” and the “innocent” were getting caught out.
He said: “Those who dump stuff in the middle of the night deserve to get fined. But most people don’t realise what’s going to happen if they put something beside a wheelie bin – and they are easy to catch.”
Roy Douglas, chairman of Muirhouse and Salvesen community council, said offenders should be made to carry out community service. He said: “For those people thinking they can get away without paying the uplift charge, yes, I think they should be prosecuted and taken to book. I would be in favour of a community order.”
But the Crown Office suggested there was often not enough evidence provided by the council to pursue FPN.
An official said: “The Crown can only make a decision to prosecute where there is sufficient, credible and reliable evidence and it is in the public interest to do so.”
James Alexander, who owns the hair salon of the same name in Queensferry Street, was also handed a £200 fine in January after a big bag placed outside his shop blew away.
A council spokeswoman said: “Flytipping is against the law. If a business owner or resident has been issued with a fixed penalty notice which they feel is unjust, they have the right to appeal. If a flytipping fine is simply left unpaid, or upheld following an appeal, the council and the procurator plan to work together to ensure offenders’ fines are settled.”