The performance of security products was described as a "major disappointment". A review of manufacturing will be completed by November. De La Rue said it would "continue to manufacture only where we can do so cost-effectively".

The announcement will lead to speculation over the future of the UK plants at High Wycombe, Dunstable and Peterborough. Steps to improve efficiency and operating performance have already resulted in 70 jobs going at High Wycombe and 20 at the Dulles site in America, at a cost of 1.3m.

The loss-making High Wycombe plant was "giving cause for concern". De La Rues statement will reignite speculation about its long-term future. In the past it has unsuccessfully applied for "change of use" planning permission for the site, which would be worth millions if redeveloped.

The security paper and print division includes the strongly-performing banknote printing operations and specialist banknote paper manufacturer Portals, which has suffered from de-stocking by a major client.

Sales in the division for the year to 30 March rose 14% to 226.8m, but operating profits fell by 9.3% to 41.1m and were further reduced by a 7.3m charge for closing its Singapore banknote printing facility.

De La Rues overall sales on continuing operations rose 24% to 641.7m, with Cash Systems starring.

The group is also buying Jefferson Smurfits 85% stake in American firm Sequoia Voting Systems for a maximum of 24.1m.

Pictured is De La Rue's chief executive, Ian Much.

Story by Jo Francis