The group manufactures the Taffeta range for paper merchant Robert Horne and its products are sold in the UK via agent Wakeman Management Services.

Gruppo Cordenons SA's president Ferruccio Gilberti said in a statement to customers that the company is working on plans with its financial partners to get back to normal activities at the site.

"This could be working towards a recapitalisation of the company which includes the entry of new investors," he said.

"Based on the results of these attempts to save the enterprise and its activities, the manufacturing operation could be resumed as soon as the new investors have entered into the ownership of shares."

Production has been "temporarily stopped" following agreement with the unions. The company said it could not continue producing with negative margins and that management is working on a new business plan.

The announcement followed reports in the Belgian media that the company was to liquidate the plant.

Gilberti said this was not and is still not the case, although the company has not yet been in the position to release an official statement.

He said: "We all hope the situation will have a positive outcome. In the meantime we are all doing our best to meet the customers' demands with our stock."