The 2,500 Unite members voted by a 9-1 majority to reject a 2.15% pay offer from employer's body the Confederation of Paper Industries (CPI).

Unite members will now go to a ballot for industrial action with the aim of claiming "a far higher settlement than could have been achieved by a continuation of the partnership approach".

Unite national officer Peter Ellis said the original claim had been for a 3.6% pay rise, but that they would have settled for less if the employers had agreed.

He said: "Last year, because of the economic climate, David S Smith, Smurfit Kappa and SAICA were able to get away with paying a minimal increase and reaped the benefit with very good profits.

"This year, as they continue to make good profits, the employers are trying to use the uncertain employment market to do the same."

He added that at talks in early October, Unite could have settled on what Ellis describes as "a modest improvement" to the 2.15% offer.

"But the CPI insisted that a pay settlement at less than half the RPI was as far as it was prepared to go," he said.

David Workman, CPI director general, said: "The industry representatives are very disappointed by the ballot result given that the wage settlement offer reflects the higher end settlements that are being accepted in the manufacturing sector."

He added that the industry "continues to be faced with rising raw material costs and ongoing uncertainty" in relation to the economy.

"The industry will be doing its best to convince its employees that any industrial action will be potentially very damaging and that the offer is a fair one given the pressures on manufacturing at the current time," he said.