The decision was taken following many years of little or no profitability, said Papyrus senior vice president for finance and logistics, Jonas Olsson.

He said that the firms digital paper and business forms business would transfer to fellow merchant Howard Smith, part of the Buhrmann Group, along with eight former Papyrus staff.

Robert Horne Group, also part of the Buhrmann Group, has agreed to purchase a small amount of stock that remains at Papyrus warehouses.

The closure of the business, which comprises four operations at Waltham Cross, Rugby, Leeds and Bristol, will take place in the second quarter.

But the closure of the UK operation in no way affects the European business of Papyrus, which will remain as part of Stora Enso.

Stora Ensos results for 2001 showed a 173% fall in Papyrus European-wide operating profit, reporting a loss of 4.4m.

The results cited low volumes and sales prices combined with a weak performance in the UK.

Papyrus distributed 100,000 tonnes of paper and board in the UK last year. It was set up in 1999 (PrintWeek, 26 October 1999), following the merger of Stora of Sweden and Finlands Enso in 1998 (Stora owned Caxton and Enso owned Brand).