The news comes within a week of Inveresk's announcement that its Carrongrove mill is to close in November with the loss of 150 jobs.

ArjoWiggins printing and operations director Christian Sciera said that a decline in the market for self-copy paper had put the mill under great pressure.

"Chip and pin, and other electronic transactions have destroyed the market for the mill's product."

Negotiations are already underway between the workforce and union representatives at Fort William, and could lead to a closure by the end of the year.

The troubled paper mill has been in decline for some time, due to the mill's reliance on the production of carbonless paper.

The mill was awarded a 5m grant in 2003 towards the building of a 23m combined heat and power (CHP) generator.

However the project did not go ahead and the money was not received. A sum of 34,000 was provided for project scoping, which the firm has offered to pay back to the Department of Trade and Industry.

Story by Andy Scott