The announcement, which was anticipated in a letter to staff last week, was made this morning by chief executive David Holland.

He told workers that a pay cut of "more than 10% but not more than 20%" would be required.

Sources close to the company said that owner Sir John Madejski is unwilling to continue bankrolling the business using his personal fortune.

However, Holland told PrintWeek that Sir John would continue to support the £68.5m turnover group "as long as it's on the right track".

"We are about £2m away from making a profit on a regular basis, and that's an imperative rather than an aspiration," he said.

"The important thing is we are not looking at savings through redundancies. We are still on a growth path and we are not looking at cutting capacity.

"We can improve our performance and are looking to reach an accord," he added. "The message is we have to have a self-supporting business. But we still have someone standing behind it."

An employee committee is being formed to consult on the proposals and determine the percentage of the pay cut. There will then be a secret ballot of all staff to determine whether employees are willing to accept the cut.