UP to 60 jobs could be lost at Blackburn-based wallpaper manufacturers Graham and Brown.

Negotiations have begun between trade unions and managers at the company, which employs more than 560 people throughout its global operations.

Most of the jobs to go will be at the company's head office in Blackburn, where around 460 workers are based.

Chief executive Andrew Graham today said the job losses were necessary due to a combination of automation, falling US sales and a big increase in the cost of raw materials.

Union leader Mr Terry Thompson said there would be further talks with the management in a bid to make sure there will be no need for compulsory redundancies.

"The management has been very open and honest with us," said Mr Thompson, branch secretary of the Graphical, Paper and Media section of Amicus.

"We want to ensure that every other avenue in areas such as early retirement, voluntary redundancy and redeployment is explored before compulsory redundancy is even considered.

"Graham and Brown is East Lancashire's last remaining large-scale wallpaper manufacturer and we want to work with the management to make sure it is here for many years to come."

Mr Graham said staff had been informed in June that 30 jobs would go in February 2005 following the company's substantial investment in automation.

Around 30 further jobs are under threat because of declining sales in the USA and higher raw material costs.

"The planned changes we are announcing are necessary to strengthen the overall business and maintain maximum operational efficiency as we continue to move forward," he said.

"The popularity of wallcoverings in the UK is higher now than for the past number of years and, as market leaders, we will continue to invest and drive the market back to growth."

Graham and Brown is now the UK's biggest wallpaper manufacturer and has used TV stars such as Changing Rooms' Laurence Llewelyn-Bowen and Linda Barker to front new ranges.