The paper manufacturer said the Lancashire-based mill has been unable to generate acceptable returns or recover a sharp increase in costs of raw materials and energy over recent years.

It is also considering the closure of paper machine PM5 at its Maastricht mill in the Netherlands.

In a statement, Sappi said it has entered into a consultation period with staff representatives at both facilities, "with a view to cease production at Blackburn mill and PM5 at Maastricht mill".

The Blackburn mill has the capacity to produce 120,000 tonnes of coated woodfree paper a year for the web printing market. The PM5 machine at Maastricht has the capacity to produce 60,000 tonnes of speciality paper annually.

Sappi's UK sales office for coated fine paper will continue operations, as will the specialities sales and marketing organisation.

If the Blackburn and Maastricht production lines do cease to produce, the group said customers would be offered comparable products from other Sappi sites across Europe.

It said if the closure was to go ahead, the company's graphic coated fine paper capacity would be reduced by 190,000 tonnes.

Blackburn mill director Willy Heckers was unable to comment.