Whitehead will join the company on 1 December as director of operations and technology. He said it was "too big an opportunity to turn down". According to sources Whitehead has been effectively "banished to Purnell" to work his notice.

It is the second time Whitehead has defected from Polestar. He left the group in February 2003 to join James Elliot's ill-fated Howitt Equator project, but went back last December. It is reported that Polestar chief executive Barry Hibbert was "not at all pleased" with the departure as Whitehead has intimate knowledge of plans for its gravure site True North.

Speculation is rife that Arvato's decision to build the Liverpool plant hung "on a signature from News International". Part of Polestar's NI contract expires in 2008, when Arvato's facility is scheduled to be running at full capacity. However, Arvato will not comment on the clients lined up for the new plant.

"We understand why people have asked that question but they have to understand that we will not answer it," said Arvato chief executive Hartmut Ostrowski, pictured on left with chief executive Stephan Krauss.

Despite not having planning permission for the plant, which is also getting 7m of funding from the DTI's Industrial Development Unit, the firm said it was confident that it would get the go-ahead from Liverpool City Council by the end of the year. "We would not have picked the site if we did not think we would get permission to build," said Ostrowski.

Construction work on the 50,000m2 facility will commence in early 2005. The plant will be located at the Estuary business park in Speke, close to Liverpool's John Lennon Airport. The group added that the plant would take on additional "local" work and that it would not result in any factory closures on the Continent.

Three new KBA presses will be installed with a fourth to be transferred from one of its plants in Germany. Decisions on pre-press and bindery equipment would be made later this year. Around 400 jobs will be created but Arvato played down earlier reports that it would grow to 1,000 jobs if it is a success. Arvato also refuted local reports that the site would produce catalogues for clients including Littlewoods,  Argos and Next.

Story by Philip Chadwick