In a statement yesterday, the firm said its 300 staff were notified of its looming administration after the directors made an application to the courts to appoint administrators.

“When administrators are appointed they will provide more information,” added Declan Slater on behalf of the company.

The Aylesford site manufactures around 400,000 tonnes of newsprint every year.

Unite regional officer Tim Elliott said: “This has come as a traumatic blow to the workforce and their families and also the Kent economy as it is one of the biggest employers in the area.

“I am meeting management and the Unite reps to see what can be done to secure a future for the company. We will be doing all we can to assist our members at this very difficult time and will be talking to all interested parties.”

In its most recent accounts, to the 31 December 2013, the firm posted a pre-tax loss of £32.7m on sales of £137.6m, although this included an impairment loss of £14.3m against plant and equipment.

However, in its 2012 accounts the company made a pre-tax profit of £54.7m on sales of £143.4m, largely thanks to the profit generated by the waiver of £78.5m of group debt.

Aylesford was acquired by US-based private equity firm Martland Holdings from Mondi and SCA in October 2012.

Just prior to the sale the business was recapitalised by its then owners, which repaid its debt and generated net cash of £23m. The business was then sold to Martland for a “nominal consideration”.

The news of Aylesford's imminent administration follows last year’s announcement that UPM was to permanently decommission one of its two newsprint machines at its Shotton mill in Deeside, which, prior to the decision had the capacity to produce 490,000 tonnes of newsprint.

The only other mill manufacturing newsprint in the UK is Palm Paper, which opened its 400,000 tonne pa Kings Lynn, Norfolk mill in August 2009.

“If the worst were to happen and Aylesford closes, then in effect the UK's newsprint capacity has halved in less than six months,” said one paper industry source.

“I can’t see anyone realistically taking [Aylesford] on; Martland were almost paid to take it on so all they’ve had to do was run for cash, and if they couldn’t make it work it doesn’t bode well,” they added.