The announcement comes less than a year after Croftacre Holdings bought the Burnley-based business from its previous administrators.

Administrator BDO Stoy Hayward was called in at the request of the companies on 10 August.

A spokeswoman for BDO Stoy Hayward said Papermarc had not been in a position to pay wages in arrears, a matter which the administrators were now handling.

Just over half of its 300 staff have been made redundant. The spokeswoman said it was unclear if more redundancies would follow.

"It is too early to say what will happen with the businesses as the administrators are currently assessing the situation," she said.

A major fire in March this year at its cardboard recycling plant in Burnley was part blamed for the company's financial difficulties.

The mill business produced 120,000 tonnes per year of waste-based containerboard and cartonboard.

Papermarc Merton comprises of three converting plants at Burnley, Leek and Aberbeeg in south Wales.

By Andy Scott