Managing director Keith Lewis said a joint decision had been made between the company's bankers and its board to call in the administrators.

Neville Whitfield and Clifford Smith, of RSM Robson Rhodes, were appointed to the company on 10 May.

Lewis said the decision had been made due to the current economic conditions, coupled with very low prices and the fall of demand for carbonless paper.

Lewis was hopeful that a deal to take on one or several parts of the business would be completed by the end of this week, with talks continuing with interested parties.

He said it is intended that Carrs Ximage digital carbonless paper will be one of the lines that will continue with the new business.

Paper merchant's Premier Paper and PaperCo stock Carrs Paper's Signal Plus carbonless paper in the UK.

Rob Viner, marketing director at Premier Paper, said: "Unfortunately, it was always going to be difficult for Carrs Paper to survive as a converter of carbonless sheets in a competitive market which is dominated by paper manufacturers." 

He added that he understood that Signal Plus is unlikely to be available in the future. Premier Paper has stocks to meet customers' requirements in the short term.

"We expect that to be able to make an announcement about Premier Paper's future distribution policy in respect of carbonless sheets within a week," added Viner.

Carrs was one of 10 carbonless paper manufacturers who were given a total of 196m in fines by the European Commission in 2002, for its part in pan-European carbonless cartel, which were accused of seeking to improve profitability through collective price increases between 1992 and 1995.

Story by Andy Scott