The paper manufacturer said the industry is experiencing further cost increases that have resulted in the need for the rises. 

Simon Guffogg, marketing director at M-real, said: "We have announced the increases because our margins are at historic lows.

"Despite also making price increases in 2010, we have not been able to keep pace with cost inflation."

He added the business is now facing "significant increases in chemicals, energy and wood prices", which he said are unsustainable.

"We have to do something about it. We have little choice but to try and recover these increases. It's all about the margins."

Guffogg said he doesn't expect circumstances to get any easier during the first six months of the year.

He said: "It's rather grim, but we are working hard to keep the price increases down to a minimum."