Some 200 residents were without water as crews tried desperately to douse flames at the Lockwood Hunter Group site.
West Yorkshire Fire Service revealed the shocking consequences of the fire, which will take “at least a week” to extinguish.
Crews were called to the waste pile blaze at the former abandoned site on Thursday evening.
They now claim they are working with the Environment Agency to minimise risks of pollution, adding that the only way to curb the inferno is to clear the rubbish.
District commander Andy Farrell said: “It will be ongoing for at least a week while we try and shift the pile of rubbish.
“Up to 200 residents had their water supply cut off while we were using the hoses.
“We are now using water from the river to minimise disruption.”
The water supply on Queens Road was turned back on on Friday morning.
A former employee for Hunter Group said the fire was “an absolute joke”.
The former driver, who wished not to be named, said: “I can’t believe how bad things have got.
“I’m shocked Hunter have been allowed to get away with abandoning the pile of waste.”
District commander Andy Farrell added that the skip hire group, who left the Queens Mill Road site after selling the business to an unknown buyer, had shown “little co-operation”.
He said: “It’s the nearby residents I really feel for.”
Fire crews have now been working with the Environment Agency and Kirklees Council to discuss what to do.
A spokesperson for the Environment Agency said: “The waste that is burning is non-hazardous, mixed household waste.
“Our officers are on site, assessing the potential impact on the environment, including that posed by the fire water run-off.
“It appears that most of the run-off is entering the foul sewer, but there is a potential risk to the nearby River Holme, so we are investigating this risk further and will consider taking protective measures, if required.
“We will continue to actively monitor the situation on site.”
Newsome ward’s Cllr Andrew Cooper condemned Hunter Group for ignoring warnings in light of the fire at the site.
The Green Party councillor, who has previously been very vocal on the waste site, said: “The former owners of the site ignored again and again warnings of legal action.
“I believe they continue to be pursued for the costs and damages they have caused.
“We will continue to push the council and Environment Agency and arrange to get this cleared up as soon as possible.
“The site remains a serious issue that is high up on my list of priorities.”