The move comes as a blow to John Madejski, the printing millionaire and owner of Reading football club, whose company Goodhead Group has lost the contract after more than eight years. There are to be job cuts among the 180 staff at the printing plant in Colchester.
BT has served the company with three months' notice that printing of the directories will be transferred to Einsa Print International, based near Madrid.
The contract was decided entirely on price, it is understood. Goodhead complained that the short period of notice meant it would be unlikely to find additional work to use up the printing capacity established in Colchester for the BT contract. Mr Madejski ranks 153rd in the Sunday Times Rich List, made his fortune as founder of the Auto Trader publishing empire, netting £174m when it was sold in 1998.