A Fife-based paper mill powered by German energy firm RWE’s plant has gone into administration.

RWE opened its new £200 million biomass facility last month and was designed to meet all of the paper maker’s electricity and steam requirements.

An RWE spokesperson said: “Our power station at Markinch can run independently of Tullis Russell and it will continue to operate.”

Administrators KPMG said 325 Tullis Russell employees are being made redundant with immediate effect while 149 “have been retained to complete some orders”.

It added the company’s market is in long term decline “as media and other outlets move from paper to digitally-based products, resulting in worldwide oversupply and price competition”.

The Markinch-based firm has also seen European exports suffer as a result of the value of the sterling against the euro and hit by rising material costs.