PAPER making at Otley's Garnett's Mill is to cease - after more than 150 years.

Around 100 workers were told this week to expect redundancies while the company's Executive Vice Chairman Cliff Barry blamed Yorkshire Water and its 'ridiculous' proposed rate increase.

In a statement issued on Friday, Garnett's announced the shift of paper making abroad and its future role as a paper converter.

Mr Barry said the decision was 'purely commercial' after the termination of its effluent agreement with Yorkshire Water following a proposed increase in rates - understood to be from £140,000 a year at the moment to £1 million a year.

In a scathing attack on the water company, Mr Barry said the proposed new rates would mean that Garnett's could not hope to compete in the paper making market in the UK.

"We have discussed potential solutions with Yorkshire Water that they have rejected out of hand. Yorkshire Water have made proposals to us that other professional bodies in the effluent field have described as ridiculous," he said.

But in a robust defence, Yorkshire Water said the proposed increase in trade effluent charges would bring Garnett's into line with other businesses and added that it had already extended the ending of the 30-year-old contract by a year.

A spokesman said: "Over the last few years, Yorkshire Water has worked closely with Garnett's in order to reduce the impact of new trade effluent charges they will be paying from November.

"We have visited the site a number of times and compiled a report detailing where they can make savings. We are still waiting to hear whether Garnett's will be applying for the new licence and are still keen to work with them so they can minimise the waste they discharge into the public sewerage system."

The company, which earlier this month installed a new gift wrap machine, says it is committed to developing new markets at a new site in the Otley area.

Mr Barry said in the future paper making would be moved to its other 'global locations' and then returned for the finishing process.

"We see these changes as being part of the process by which UK companies survive, evolve and grow for future generations, as they have to cope with both local and global trading conditions. We remain completely committed to the area and also the employees of the company and its locality."

In a letter to all employees on Friday, Garnett's said it was planning a 'number of redundancies' in all departments and invited representatives from all areas to take part in a consultation with bosses.

Siting Yorkshire Water's 700 per cent rate increase, a severe down turn in demand from Europe and an inefficient operating plant, the company said it wanted to give all employees the chance to express their views.

One worker, who had worked for the company for ten years, told the Wharfedale that he believed he would lose his job.

The Otley man, who wished not to be named, but who worked in the paper making section of the company, said workers had been told in May all their jobs were safe.

"People are wondering what they can do and are worried about their families. My concern is those operating the machinery won't be happy switching to checking paper and it'll be a lot less money."

On Monday, a second Garnett's statement, from acting chairman Mahendra Mehta, said the changes would be a challenge to the company and its workers.

"The management of these changes will be a challenge for everyone at Garnett's and unfortunately it is inevitable that there will be redundancies in areas of business where the greatest changes are. It is hoped that the redundancies will be voluntary and a letter has been sent out to employees to start the consultation of this process."

Earlier this year, the Wharfedale exclusively revealed proposals to redevelop the 20-acre riverside site with a mixed development of houses, offices and a retirement village.

Garnett's said this week that the redevelopment of the land would help it invest in the company and bring about the necessary changes.

It added that its shareholders had endorsed a dramatic increase in the scale of investment in the company so it could compete against other market leaders.