Ecco has been granted planning consent by Redcar and Cleveland Borough Council permitting construction to start, although the project is still subject to financing building and operating costs.

Despite the recession and reduced demand, a company spokesman said "good progress" was being made and the company remained hopeful of completing its fundraising in the near future.

"Against the backdrop of the current economic slowdown, the business represents an even more important investment for the UK than before," he said.

"Once up and running, it will create a large number of new jobs both directly and indirectly."

Ecco has been "significantly assisted" by the support received in the past six months from its supply partners and customers, who are helping the business achieve a close to its financing process.

The company spokesman added that there was room in the marketplace for the capacity that is planned, because the UK remains a significant net importer of newsprint.  

At full capacity, the mill will produce more than 400,000 tonnes of newsprint per year.

See also:

Need for Ecco's recycled newspaper mill 'stronger than ever'

Ecco’s Teesside site hit by rising building costs