John Swinney, the cabinet secretary for finance and sustainable growth, met yesterday with Sir Menzies Campbell MP, Iain Smith MSP and Ted Brocklebank MSP. He had previously spoken with KPMG administrator Blair Nimmo.

A Scottish government spokesman said: "Mr Swinney made clear to the administrator the Scottish government's willingness to support any development to continue the operation at Curtis Fine Papers, as the government valued the continuation of manufacturing activity in North East Fife."

The administrator has assured Swinney he will not be closing the door "on any option".

Swinney also made clear that as well as searching for a way forward to continue business activity, support is being made available to staff issued with redundancy notes.

Fife Council, the Skills Development Scotland and Jobcentre Plus, under the umbrella of the government's Partnership Action for Continuing Employment, will provide support for those who have been left facing unemployment.

The spokesman added: "The government is very clear in its determination to support individuals and to try to ensure we have a continuation of activity at the Guardbridge plant."

Last week, Curtis went into administration and staff were told they would be paid for the past month's work following a sit-in protest at the paper mill led by managing director Keith Chapman.

Following the news, during which 180 staff were told "very suddenly" they were being made redundant with many not being paid for the past four week's work, Chapman led the protest to put pressure on administrators KPMG Restructuring to pay his staff.

Nimmo and Gary Fraser of KPMG Restructuring were appointed as joint administrators of the 135-year-old Guardbridge, St Andrews-based paper mill.

Of the 260 staff, 80 have been retained to keep the company trading while the administrators attempt to find a buyer.

The £35m-turnover company has experienced significant losses in recent years, and has been hit by a strong euro and the rising cost of raw materials.