In the method using blue and white selectable markers, recombinant colonies are differentiated from non-recombinant ones based on their ability to produce color in the presence of a chromogenic substrate.

Statement I is incorrect. The blue-colored colonies do not contain the DNA insert in the plasmid. They are non-recombinant because the enzyme β-galactosidase is still active and able to cleave the chromogenic substrate, producing a blue color.

Statement II is correct. Colonies that do not exhibit a blue color indicate that a DNA insert is present in the plasmid. This insert disrupts the coding sequence of the enzyme β-galactosidase, inactivating it. Thus, these colonies do not produce color and are identified as recombinant.

In summary, recombinant colonies lose their ability to produce blue color due to the insertional inactivation of the β-galactosidase gene, while non-recombinant colonies appear blue.