The firm's chief financial officer Hannu Ryopponen revealed the cuts as Stora Enso reported its year-end results for 2005.

The Finnish-Swedish producer intends to take out 250,000 tonnes of lightweight coated paper capacity in France alone, with the closure of its two paper machines at its Corbehem mill in France.

A 95,000 tonnes machine at its Varkaus mill in Finland and 25,000 tonnes of coated specialities in the US are also set to be closed.

The Finnish labour dispute last year cost the company 130m (190m) in lost production, with operating profits down 16% to 243m.

Sales increased by 6.4% to 9bn on the previous year, helped by the firm's acquisition of the paper merchant group Schneidershne, which accounted for 241m of the increase.