The Swedish Finnish manufacturer said production has now commenced at all of the group's production plants in Finland, but saleable paper will not be produced until this week.

The Finnish paper dispute lasted for seven week's with employers imposing lockouts at all Finish following a series of wildcat strikes.

The dispute was over a new working agreement, which has now been resolved.

Fellow papermaker M-real issued a profits warning earlier this month, after it said the production disturbances would weaken its second-quarter result by 47m, of which just over 13.5m is attributable to the decrease in product inventories.

Stora Enso's third quarter results for 2005 will now be affected by the machine start-ups in the first week of the quarter.

Stora Enso's results will also be affected by the firm's decision to lay of all 92 staff at its Veitsiluoto sawmill in Finland, from July until December 2005, a move that will cost approximately 8.2m.

During the lay off period the firm will decide whether to resume production at the sawmill.

Stora Enso's second quarter results for 2005 are due to be announced on 27 July.

Story by Andy Scott