An emergency debate on the steel crisis will be held in the House of Commons.
Business Secretary Sajid Javid has raised the prospect of Government involvement in the sale of Tata Steel’s loss-making UK assets, after Labour warned that the future of the industry was “hanging by a thread”.
The Government is “looking at the possibility of co-investing with a buyer on commercial terms,” Mr Javid told the Commons.
But MPs will have up to three hours to discuss the crisis in further detail after shadow business secretary Angela Eagle secured an urgent slot in the chamber.
The search for a buyer for Tata Steel’s UK business has started, with “many tens” of firms set to be contacted in the hope of saving thousands of jobs.
Executive group director Koushik Chatterjee said the aim was to sell the assets as a whole rather than splitting up the business.
Tata announced the signing of an agreement to sell its Long Products business, including the giant Scunthorpe plant, to investment firm Greybull Capital, in a deal that safeguards thousands of jobs and holds out fresh hope that the rest of the business can be saved.
The sale covers several UK-based assets including the Scunthorpe steelworks, two mills in Teesside, an engineering workshop in Workington, Cumbria, a design consultancy in York, and associated distribution facilities, as well as a mill in northern France.
No timescale has been given for the sale of the rest of the business.
The UK business as a whole, including the huge plant at Port Talbot in South Wales, is losing £1 million a day, and for the last year has been making “significant” losses.
It is understood that more than two firms have expressed an interest in Tata’s plants, including Liberty House.
Mr Chatterjee said the capital commitment needed in the short and long term was not something the Tata board could afford to support.
Union members at Scunthorpe are being balloted on whether to accept a 3 per cent cut in pay and reductions in pension contributions for a year to smooth the path for the Greybull deal, with the result due next week.
Mr Javid gave senior ministers an update on the Government’s efforts to support the steel industry at the regular weekly meeting of Cabinet in 10 Downing Street.
Prime Minister David Cameron’s official spokeswoman said there was no detailed discussion during the meeting about what “co-investment” in businesses might involve and was asked if co-investment would amount to part-nationalisation.
The spokeswoman said: “The Prime Minister has been clear that he wants to look at what the Government can do to support a successful sale of the steelworks in Port Talbot and maintaining the viability of the industry there, but nationalisation is not the right answer.”