HALIFAX - The future of a paper mill on Nova Scotia's South Shore hinges on a plan that could include provincial government funding and breaks on energy costs, Premier Darrell Dexter said Wednesday.

Dexter said officials with the Bowater Mersey paper mill made an urgent appeal for assistance during a meeting earlier in the day that included sawmill operators as well as union and municipal representatives.

He said officials told him the plant would close if it didn't receive help from the government and its suppliers to cut costs.

The premier told the legislature that AbitibiBowater (TSX:ABH), which owns the mill in Brooklyn, N.S., first informed him in August of their intention to close the operation.

"I indicated at that time that I thought this was an unacceptable position for the company to take," said Dexter.

He said he told the company there had to be a way to allow the mill to continue operating.

"They indicated that they didn't believe that was the case, but that they were prepared to listen to us," he said.

Outside the legislative chamber, Dexter said the company is open to reconsidering its decision if a plan is in place by the time of a board meeting in December that would make the mill more competitive.

He said the company is looking for major concessions from its workers and help to cut its production costs from suppliers as well as a reduction in power rates. The company is looking at reducing its manufacturing costs from $537 a tonne to $480 a tonne, Dexter said.

He said any assistance package would include funding help from the province, though he couldn't say how much that could be.

"If there is assistance that we can make that would lead to a long-term sustainable renewal of the plant, then we are prepared to look at that."

The mill employs 300 workers, but Dexter said up to 2,000 people in the surrounding area would be affected if the mill closes.

AbitibiBowater did not return a request for comment.

The company said Tuesday it would shut down the mill for a week beginning Nov. 14 to adjust shipments to address lower demand. A spokesman also said officials would be taking a close look at the costs of running the mill, including electricity and labour.

Bowater Mersey officials recently appeared before the provincial regulator in Nova Scotia looking for a reduction in electricity rates.

In a statement Wednesday, Nova Scotia Power, the province's private utility company, said lowering power rates was a matter for the province's Utility and Review Board to decide and it looks forward to its decision.

Bowater Mersey's appeal for help came the same day that the court-appointed monitor overseeing the sale of another financially troubled paper mill announced that two potential buyers were seeking lower power rates.

Matthew Harris, a spokesman for Ernst & Young, told the province's Supreme Court that two of the remaining four bids for the shuttered NewPage Port Hawkesbury mill in Point Tupper, N.S., would resume operations if they got breaks on electricity costs.

Liberal Leader Stephen McNeil said there would have to be a concerted effort in a limited amount of time to come up with a long-term fix for the province's struggling papermaking industry. He said all parties affected would have to find a solution.

"The decisions they make will have to be across the province," McNeil said. "We need to make sure that the impact is fair and that it's not having undue consequences somewhere else in the economy."

Conservative Leader Jamie Baillie said he was willing to help in efforts to continue Bowater Mersey running.

"The PC party stands firmly behind anyone that has a practical idea on how we can keep the plant working," Baillie said.

Dexter said the government has spent about $14 million so far to help NewPage after it shut down in September.