The Finnish paper giant acquired its rival in August following a protracted courtship that started last December.

Shortly after the acquisition it announced plans to cut 1.3m tonnes of European paper capacity.

It announced today that, following a review, it was "unable to establish a way to meet the commercial requirements for continuation of operations" at Myllykoski.

In total 371 employees at the mill be made redundant, with a further 21 staff at Myllykoski Corporation and Myllykoski Sales Nordic losing their jobs. Job cuts will begin in January 2012.

Jyrki Ovaska, president of UPM's paper business group, said: "The Myllykoski mill has been making a loss for several years despite numerous measures aimed at making the operations more efficient.

"The mill’s cost competitiveness is weak. The high costs of raw materials and energy have further increased total costs and permanently damaged the mill's opportunities to reach a profitable level,"

"This is a heavy day for Myllykoski people. However, it’s important to face the realities and to look ahead. UPM will support re-employment and training of Myllykoski personnel."

Last month UPM announced a drop in its profit expectations.