The government is being forced to rethink its nuclear energy policy after voters in canton Nidwalden refused to provide a home for Switzerland's first nuclear waste dump.
There are few alternatives to the proposed underground site in Nidwalden.
Sunday's vote was the second time since 1995 that residents of the central Swiss canton have thrown out plans to bury radioactive waste in an underground cavern below the local Wellenberg mountain.
The first vote was close, but this time nearly 60 per cent said "no".
The decision is being seen as a slap in the face for the government for failing to come up with an alternative site.
For 30 years, Switzerland's has been stockpiling the nuclear waste produced at its five nuclear power plants in temporary storage areas. Switzerland sends nuclear waste to Britain and France for reprocessing but is contractually obliged to take it back.
It has been estimated that Switzerland will have several hundred thousand tons of nuclear waste ready for disposal by 2050.
No place for waste
But the government agency, Nagra, which was set up 30 years ago to dispose of nuclear waste, has yet to find a place to put it.
Hans Issler, president of Nagra, told swissinfo that he hopes parliament will construct a new nuclear energy law to take away the right of veto from the cantons and avoid a repeat of Nidwalden.
The Senate has voted to take the veto away from the cantons, but the House of Representatives on Monday said it should remain.
"The federal government has to work with the cantons to find a solution," Issler told swissinfo.
Issler and the nuclear energy industry have been upset that a canton with only 28,000 eligible voters can decide the fate of nuclear waste for the entire country.
"A new law should clearly define the responsibilities of the canton and the federal government on this issue," Issler said.
Nagra has conducted a feasibility study for a new dumpsite in canton Zurich but the organisation fears that it too will be rejected if it comes to a vote.
Despite the setback in Nidwalden, it would appear the government and parliament still have time on their side.
Hans Gubser, director of the association of Swiss nuclear power plants, said there was "enough capacity to store nuclear waste in the existing temporary storage tanks for the next 50 years".
That is, of course, if Switzerland is still in the business of producing nuclear energy.
Swiss voters are expected to go to the polls next year to decide whether to extend a moratorium on the construction of new nuclear power plants by another ten years and to shut down the three oldest plants in the country by 2013.
Switzerland has five nuclear power plants.
About a third of all electricity produced in Switzerland is nuclear.
Nidwalden has twice rejected a dump for nuclear waste.