Some of the UKs largest newspaper publishers could reduce their newsprint quota from UPM-Kymmene unless an agreement over pricing is reached, according to newspaper reports.

Publishers still locked in negotiations with UPM-Kymmene, Europes second largest paper manufacturer, include Daily Mail & General Trust, News International and Trinity Mirror.

The newspaper publishers believe that prices are being kept artificially high and are aiming for a reduction of at least 10% to 12%, but it is believed that UPM-Kymmene is only willing to accommodate a 5% fall.

UPM-Kymmene vice president of corporate communications Markku Franssila said the firm was still locked in negotiations with a number of UK publishers.

He added: "It is not that unusual for us to start negotiating at this time of year. But paper negotiations have been very hard this year as publishers have been hit by the decline in advertising."

The firm serves the UK newspaper industry primarily from its Shotton Paper mill in north Wales.

A spokesman for Trinity Mirror said: "We cant comment at the moment, as were right in the heart of negotiations. Its too commercially sensitive."

A source close to the negotiations said it was believed that tonnage from UPM-Kymmene to the UK would be cut unless the company could come up with a more competitive price at the eleventh hour.

The uncertainty over next years prices comes after the European Commission approved UPM-Kymmenes acquisition of Haindl in November. Director of the European Newspaper Publishers Association, Dietmar Wolff, said the Commission had effectively condoned the creation of an oligopoly of four big companies.

Story by John Davies