The schemes will continue to be defined benefit schemes but future increases in pensionable salaries for active members will be restricted to RPI up to a maximum of 2% per year.

Group finance director John Denman said more than half of the firm’s 500 employees were members of the schemes, which were closed to new members 10 years ago.

Evaluations of the schemes following the change in April showed a combined deficit of £1.4m, compared with £14.2m at the previous year end.

James Cropper has also confirmed the closure of all its retail outlets under the banner of The Paper Mill Shop. This business is expected to have incurred a loss of around £1.8m, including £1.1m of exceptional costs relating to the closure, in the financial year ended 2 April.

Chairman Mark Cropper said the company had "dramatically reduced the threat posed by its pension schemes and retail activities".

James Cropper is a manufacturer of speciality uncoated papers, and a paper and board converter.