Kari Vainio, Storas executive vice president of communications and investor relations, confirmed that a restructuring of the UK business was underway, but said that any announcements would "come from Papyrus itself".

However, Papyrus UK managing director Steve Thomson said only that it was "pretty clear something was going on", but was not in a position to make any statement.

"Some of the rumours I have been hearing have been fairly wide of the mark," said Thomson, who rubbished claims that Howard Smith Paper was one of the parties interested in buying several Papyrus divisions.

Stora Ensos results for 2001 show a 173% fall in Papyrus European-wide operating profit, recording a loss of 4.4m (E7.2m).

The results cited lower volumes and sales prices, combined with a "weak performance in the UK".

One industry source had heard that Robert Horne, part of Buhrmann, had purchased the order book of Papyrus, and several other sources said Robert Horne was thought to have agreed a deal to buy the order book of the carbonless, digital and office products divisions.

Robert Horne Group marketing director Bob Latham refused to comment on the rumours.

Buhrmanns corporate communications manager Ewold de Bruijne said: "We are always one of those companies that is associated with rumours like this."

Papyrus is expected to issue a statement today (5 April) or early next week.

Story by Andy Scott