The project includes the building and operation of a pulp mill, paper mill, saw mill and renewable energy plant in Cromarty Firth, which could create up to 500 new jobs.

Environmental consultant Environ UK will start the assessment immediately, a process that should be completed by early 2006.

Forscot chairman Ed Gillespie said that Environ would help to design and run the operation, to ensure the technology used fully complied with European Union, national and local environmental and planning legislation.

Once operational, the plant will use Sitka Spruce trees, grown in Scotland and northern England.