Polestar dominates the UK market with three plants. Its only domestic rival is Dundees DC Thomson, which does little commercial work.

"I believe that somebody will set up something in the UK," said one well-placed source, who said German media group Bertelsmann had been linked to the venture. "The UK is crying out for it when you look at the amount of gravure printing going overseas. Quebecor was in pole position 12 months ago but I doubt it now because they have 28 gravure presses in Europe."

After its failed bid for Watmoughs, Quebecor said it would set up a gravure site in the UK, but chose to buy on the continent instead.

The source said the most likely scenario would be for a foreign printer to secure major contract work and set up a plant to meet demand.

Another source agreed that Bertelsmann had been linked with a UK operation in recent years. A UK-fronted group is also sounding out the market.

Gruner + Jahrs Mark Pfeiffer said he had heard talk of a new operation. But he said his firm, part of the Bertelsmann empire, had sufficient capacity in its German plants to service UK clients. "It would seem strange at a time when theres a lot of capacity in the European market to look at building a plant in the UK." However, Steve Haithwaite, director of publications at Argos Retail Group, said: "I think theres a market in the UK."

The strength of the pound and higher investment have favoured continental printers competing for UK publication, mail order and gravure work.

Polestar did invest in a Cerutti 35RS gravure press at its Purnell site last year. Earlier this year it decided to keep open the press hall at Greaves in Scarborough, after losses put the business future in doubt, although it was forced to close the plants bindery.

French group Lenglet is also targeting the UK, installing two 3.7m-wide KBA presses as part of a 48m (75m) investment.

Story by Gordon Carson