AUGUSTA – Gov. John Baldacci and officials of Georgia-Pacific Corp. said Friday that an economic plan worked out between the state and the company should enable a tissue machine and eight converting lines to be restarted at the Georgia-Pacific mill in Old Town, bringing about 150 idled employees back to work in about two weeks.

As part of the plan, the state would be prepared to buy an industrial landfill in Old Town that is currently owned by Georgia-Pacific.

Georgia-Pacific, meanwhile, would be looking to install a biomass boiler.

Baldacci aide Jack Cashman said the state would also be seeking to bolster the company’s shipping capabilities, possibly by suggesting ways that Georgia-Pacific traffic might be coordinated with shipments of other products.

“The plan we are announcing will restore a substantial number of jobs, and have farther reaching benefits for the larger community,” Baldacci said in a prepared statement. “This encouraging development is the product of hard work and a true collaboration.”

On April 4, Georgia-Pacific announced that it would retire its two tissue-manufacturing machines at the Old Town mill, a move that would have cost about 300 jobs.

In a joint statement issued by Baldacci’s office Friday, A.D. “Pete” Correll, Georgia-Pacific Corp. chairman and chief executive officer, said that “since we announced the closure of our Old Town tissue operations, Georgia-Pacific has been engaged in very active and productive discussions with Gov. Baldacci and his staff.

“We are very grateful that, thanks to their leadership, along with significant involvement and support from PACE Local 80 leaders, we have been able to put together a strategy to retain part of the Old Town tissue operation and address some of the cost factors that originally led to our closure decision,” Correll said.

The Old Town mill, which also employs more than 200 workers related to pulp manufacturing, is a unit of Fort James Operating Company, a subsidiary of Georgia-Pacific, which is headquartered in Atlanta, Ga.

“Everything fit together quite well,” Cashman said.

The planned state purchase of the company landfill might involve revenue bonds but would not require General Fund money, he said.

According to the joint statement from Baldacci’s office, the proposal would be presented to the Legislature for approval.

“In the end, we were astounded by the efforts put forth to develop a tangible economic package – one that is too good for us to walk away from,” Correll said. “Georgia-Pacific is more encouraged now than ever before that Maine is a place where we want to do business.”

Correll added: “At the same time, however, we intend to reduce Georgia-Pacific’s overall tissue capacity elsewhere through an ongoing review of our total tissue production and the best way our system can serve our customers.”

U.S. Rep. Michael Michaud, a Democrat from East Millinocket, praised the announcement.

“Georgia-Pacific recognizes what we all know about Old Town and the rest of Northern Maine: we have some of the best workers in the world. Their decision will ensure that during this tough economic time, good jobs will stay in Northern Maine,” Michaud said.

“Although this is great news, we must not forget the other workers affected who will not be going back to work. This is an incredibly difficult time for them and their families, and we must provide them whatever assistance necessary to get through this,” Michaud said. “We must also address some of the bigger problems of the pulp and paper industry in Maine.”

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