I normally use OHP transparencies (acetate) for my PCB masking, but after running out I wanted to find something cheaper (from staples a pack of inkjet transparencies costs approximately £20!). I wanted to try and use paper, since it’s essentially free (everyone has it) and I wouldn’t have to go out and buy more stuff!
So, after a bit of searching, I found that a few people had mentioned using paper, but provided no results. They mentioned using two methods: just raw paper, and transparent’ised paper. To do this I used oil (another essentially free product. This involves taking the paper (after it has been aligned on the PCB) and gently rubbing oil into it. You are aiming for the paper to be essentially dry’ish to touch, with the paper absorbing most of the oil. Try to make it as consistent as possible (from the colour) as oil/non-oiled areas can cause problems.
The image below shows the results:

From the left, these are my test exposures with mask developing but no etching. We can see that if we wanted to use just plain paper, we would have to expose for much longer than 5 minutes. The oil soaked paper worked better, with 5 minutes showing ok results.
The PCB in the middle was my first attempt using raw paper, with a UV exposure time of 15 minutes. We can see that the results are ok, but there are many shorts. A longer exposure and less air gaps in the mask would help here. The final PCB on the right is oil soaked paper with an exposure time of 6 minutes. Results are very good except for a few shorts.
Conclusions: Oil soaked paper works pretty well, considering the cost. I’ll try and perfect this technique next time.
Note that my exposure box seems to require much longer exposure times that everyone else’s, so test yours at a lower exposure time first. Also, the marks on the rightmost PCB are from my clamp when cutting (too tight!). These will come out when I buff the UV sensitive mask off.