The scheme, which allowed top-up cover to be provided by the government to companies that saw a reduction in their trade credit insurance cover, will finish on 31 December. 

While several companies in the paper sector did take up the scheme, many have said it did not get to the heart of the problem with credit cover, due to the fact it only applied where cover had been reduced and not withdrawn. 

Elizabeth Jenkin, sector leader for pulp and paper products and director at Aon Trade Credit, said the first draft of the scheme in this year's budget produced something that was "expensive, ineffective and frankly, off the mark".

She said: "The fundamental flaw of the scheme was that it didn't cover cancellations or declines for increases.

"As a result, paper merchants suffered across the board in the private market from wholesale reductions and cancellations."

However, for all the scheme's flaws, after two revisions, Jenkin said it did offer a viable option in some cases and some additional trade was established.

"Frustratingly, all the government needed to do was to extend the scheme to cover full cancellations, price the risk in line with a more reasonable market rate from the start and engage with UK businesses to see what they really required," she added.

"As an industry, the paper trade won't lose much when the scheme runs out, yet we cannot help but feel this was an opportunity lost."

Susan Ross, director of Aon and chair of the British Exporters' Association, said it was "disappointing the scheme failed, but not unexpected".

She claimed that the government had failed to consult trading businesses to find out what they really needed. "For the SME sector, the issue was that limits were withdrawn, not just reduced. They needed new capacity, not a multiplier of an existing limit."

A Department for Business spokesman said: "This is a temporary scheme the department put in place to provide targeted, transitional support to firms whose cover had been reduced and who needed support while they adjusted to new conditions."

To date, 105 policies have been accepted for 72 suppliers and cover to the value of £18.5m has been issued.

He said: "Many businesses have found other ways to adapt and thus have not needed to take up the government offer.

"This scheme will close to new applications at the end of the year as set out at its launch."