It will initially close 400,000 tonnes of production resulting in 2,000 job losses. A decision is expected within a year on the closure of an additional 882,000 tonnes, resulting in a further 2,300 redundancies.

More than half of the job cuts would come from the Nordic countries.

The remaining capacity reduction will result from the sale of six plants reducing paper and board capacity by 530,000 tonnes and pulp capacity by 305,000 tonnes.

The Finnish paper producer plans to save 204m (300m), as part of its Profit 2007 and Asset Performance Review programmes.

The firm's third quarter sales were up 6.1% to 2.1bn. Pre-tax profits fell 24% to 63.1m.

Chief executive Jukka Hrml said orders had continued to be affected by the aftermath of the Finnish labour dispute.