ArjoWiggins announced plans for a review of its Fort William operation in June this year, which could lead to the mill closing in November.

The DTI has given ArjoWiggins' management a deadline of mid-August to provide it with details of plans for the future of the Corpach-based plant.

This latest development by the DTI follows discussions between Liberal Democrat leader and Charles Kennedy MP and Trade and Industry Minister Malcolm Wicks at Westminster on 20 July.

Kennedy, whose Lochaber constituency contains the Fort William plant, is keen to see that all options remain open for discussion on the mill's future.

This includes the award of a 5m DTI grant in 2003, which was to be put towards the building of a 23m combined heat and power (CHP) generator.

"I was struck by the genuinely constructive tone and positive approach by the DTI," said Kennedy.

He added that while the DTI was keen to remain supportive, it needs to know if future plans will include the biomass technology on site.

If the biomass project was to go ahead, Kennedy said its contribution to UK renewable electricity generation targets would be counted as part of the DTI's long-term target of 10% by 2010. Management at ArjoWiggins have yet to respond.

A 90-day consultation period between management and union representatives over the 150 jobs at the site is due to expire at the end of September.

Story by Andy Scott