According to newspaper reports, Mondi, which owns 50% of Kent-based Aylesford Newsprint, has an estimated value of 3bn-4.5bn and will go straight into the FTSE 100.

It is believed that its current owner, Anglo American (AA), will retain a 70-75% stake following the IPO, which is expected to happen within the next 12 months.

The decision to list Mondi, which includes Mondi packaging and Mondi business paper (previously Neusiedler), follows AA's announcement in October that it had completed its strategic review.

The firm declined to rule out the possibility of finding a trade buyer for Mondi.

As well as Aylesford, Mondi includes nine pulp and paper mills and 105 packaging production plants in Europe, the US, Russia, Asia and Africa. In 2004, it posted a group turnover of 4bn and 319m operating profit.