Would This Be Ok For Litter Trays

http://www.lawsonanimalfeeds.co.uk/rabbit-bedding/240-white-paper-bedding.html

its a huge bale for only £7.50

I would use it with a layer of newspaper and that on top

No reason you couldn't. Bobmartin switched their paper based litter to that style recently but I didn't find it as good as the original (looked like cat litter but made of paper) seemed less absorbent. But price wise it might work out cheaper even if you need to use a little more.