Pagination with custom post types

Hello,

I’m having a problem getting the pagination appearing for my custom post types. Here is the code I have so far:

$paged = (get_query_var('paged')) ? get_query_var('paged') : 1;
			$args = array(
				'post_type' => 'newsletter',
				'posts_per_page' => 10,
				'orderby'=> 'menu_order',
				'paged'=>$paged
				);
			$loop = new WP_Query( $args );
			custom_query_posts();
			while ( $loop->have_posts() ) : $loop->the_post();
				echo '<div class="newsletterExcerpt">';
				echo '<h2>';
				the_title();
				echo '</h2>';
				echo '<div class="entry-content">';
				the_excerpt();
				echo '<div class="entry-content-border"></div>';
				echo '</div>';
				?>
				<a href='<? the_permalink() ?>'>Read more →</a>
				<?
				echo '</div>';
			endwhile;
			?>
			<div class="navigation">
        		<div class="alignleft"><?php previous_posts_link('&laquo; Previous') ?></div>
        		<div class="alignright"><?php next_posts_link('More &raquo;') ?></div>
        	</div>

and in functions.php the function custom_query_posts() is as follows:

function custom_query_posts(array $query = array()){
    global $wp_query;
    wp_reset_query();
    $paged = get_query_var('paged') ? get_query_var('paged') : 1;
    $defaults = array(
        'paged'             => $paged,
        'posts_per_page'    => PER_PAGE_DEFAULT
    );
    $query += $defaults;
    $wp_query = new WP_Query($query);
}

I’ve been looking at this for awhile but just can’t seem to figure it out.

So any help appreciated.

Regards,
Stephen