The city has earmarked woods in the suburbs as an alternative to graveyards, after an audit showed that one of its six municipal cemeteries was full and two more would have to turn away burials within a few months.

Reflecting a national problem, only one cemetery in the city can accommodate a substantial number of new graves. With 30% of the population still opting for burial instead of cremation, room has to be found annually for 160,000 new burials - the equivalent of interring the population of Bournemouth.

The Liverpool project has been approved by the Liberal Democrat-controlled council, which has stipulated bio-degradable coffins and a minimum of disruption to the countryside. Saplings and tree-stumps will take the place of headstones and formal signings to the green graveyards will be modest.

A council spokesman said: "People are much more environmentally conscious nowadays, and there is a real interest in green burials, quite apart from our potential problems with space."

The scheme will start next month in woodland at Woolton, where ashes of cremated bodies will be buried. It will then expand to Allerton, where woods will be designated as green burial grounds.

Enthusiasm for "natural" burials grew last year when the novelist Barbara Cartland opted for a biodegradable coffin. There are now 130 green graveyards across the country and most are privately run.