The union claimed that company bosses have refused to follow dispute procedures and that negotiations over the planned redundancies have failed.

In October last year, it was announced that 99 employees at the 484-staff mill were to be made redundant as part of plans to close one of the company's two machines.

However, workers are now angry at alleged plans to use part of a bonus budget, intended to reward staff, to fund the £1.5m cost of making the staff redundant.

Peter Ellis, Unite national officer, said: "We have attempted to get into dialogue with Iggesund's bosses, but the company has said it is not going to discuss things anymore. Our members are incensed."

Iggesund is said to have blamed the weak paper market for the planned closure of the machine, and Ellis added that while it is loaded with work, it isn't profitable.

Unite regional officer Eddie Irvine said the company had offered "the worst redundancy terms in Iggesund's history – just slightly above statutory minimum".

The union claimed that Iggesund had been hostile from the start and refused to follow procedures outlined in a national agreement between Unite and the Confederation of Paper Industries (CPI).

Tony Burke, Unite assistant general secretary, said: "The CPI has advised the company to use the industry procedures but they have turned down the CPI's advice.

Iggesund could not be reached for comment.

"Therefore, we have no alternative than to ballot for strike action and notify our international union partners of this serious situation."

Iggesund Paperboard is a member of the Holmen Group and manufactures high-quality virgin fibre paperboard for the packaging and graphics sectors.