Construction of the Trafford, Manchester-based recycled paper mill will begin in early 2010, with operation due to begin in Feburary 2012.

When fully operational, 400,000 tonnes a year of 100% recycled paper containerboard will be produced at the Partington mill from recovered paper.

Up to 200 jobs will be created and 450,000 tonnes of used paper will be diverted at the site for use within the UK each year.

The Spanish paper and packaging group said this will significantly reduce containerboard imports coming from Europe, which will reduce the CO2 emissions of exportation and importation.

Eduardo Aragües, president of the SAICA Group, said: "This huge investment in the current climate is the best message SAICA can send to its UK customers, to whom we are fully devoted and with which we are establishing a long-term partnership.

"SAICA is committed to supply its UK customers with the best products on an environmentally friendly basis."

Once up and running, the company's 7.5m-wide Paper Machine 11 will operate at speeds of up to 1,500m/min, producing high-performance, lightweight containerboard at weights of 75-125gsm.

The mill will be fully integrated and use a combined heat and power station to generate energy, as well as use advanced effluent treatment.

It was initially announced that the mill would be operational by 2010, but in April last year SAICA delayed the plans due to the economic climate.