As a result the Fife-based papermaker has agreed to make additional annual cash payments of 740,000 into the scheme over the next 10 years. It will assess the level of contribution each year.

The deficit has been calculated using the new Financial Reporting Standard 17.

Chief executive Fred Bowden said that while he was far from happy with the size of the deficit, it could be accommodated because the firm had no net debt.

The scheme had also been switched from equities to bonds, which would prevent the deficit from becoming larger given the state of the equity markets, he said.

Tullis Russells sales rose 4% to 139m for the year to 31 March but pre-tax profits dropped 11% to 5m (PrintWeek, 19 June).