Finance director Peter Johnston said the situation was a affecting a handful of the group's suppliers. "A couple of credit insurers had threatened to withdraw cover, although one has since reinstated it. I don't think it's a reaction to Polestar, I think it's a reaction to market conditions."

"We've got a very good and supportive suppliers base and we have a good relationship with them," he added.

Financial services giant Zurich confirmed to PrintWeek that it has ceased to offer credit insurance for 365m turnover Polestar, describing it as "an individual case. There is no change in our general policy".

Johnston reiterated: "This actually only affects one of our suppliers and they have arranged alternative cover so their trading relationship with Polestar is unaffected. Other insurers continue to offer cover for Polestar."

Three years ago Euler Trade Indemnity cut Polestar's cover across-the-board after a financial hiatus caused by the illness of then finance director Malcolm Robertson.

It's currently a costly period for Polestar as it copes with the start-up costs at Sheffield and plans for the closure of Purnell, likely to cost several million pounds. However, the group did retain a 10m reorganisation charge on its balance sheet to complete its restructuring programme.

"Cash is tight as always. Our shareholder wouldn't have it any other way," Johnston said. The group is close to an agreement on the clo-sure terms at Purnell, and is confident it will resolve the issues within the 90-day consultation period. Johnston praised staff at the plant for their professionalism in difficult circumstances.

[0] Polestar Chantry will continue to print She magazine for NatMags when the title undergoes a major revamp and is relaunched in the autumn.

By Jo Francis