A Lincolnshire firm says a proposed new plastic bag tax could mean major job losses.

CFN Packaging, which produces carrier bags, says up to half its workforce could be at risk.

The government is considering a charge on all plastic bags to encourage recycling.

But CFN says the bags form a substantial part of its turnover.

The workforce may be halved

The Skegness-based company employs 80 people.

Colin Clark of CFN Packaging said: "We would have to wind down on that production and we would have to lay off staff.

"That could mean up to half the jobs here going."

The government wants to reduce the large numbers of plastic bags used, and thrown away, in Britain every year.

Landfill sites

About eight billion carrier bags are made in the UK each year, but only 1 in 200 are recycled.

Most end up as litter or in landfill sites where they take about 30 years to degrade.

The tax has already been introduced in Ireland where their use has dropped sharply.

An official report will be handed to the government this week.