British Steel could be returned to state control

Ministers are considering renationalising British Steel in a last-ditch attempt to save thousands of jobs, amid a standoff between the government and the company's Chinese owners over a £1bn investment.

- Kiran Stacey, Jasper Jolly

Jonathan Reynolds, the business secretary, is in talks with British Steel and its owner Jingye on how much each party should put into a rescue plan for its main Scunthorpe site.

But with the discussions showing little sign of progress, sources say Reynolds is open to taking over the company entirely, in a move that would reverse Margaret Thatcher's 1988 privatisation of the industry.

One Whitehall official said: "It is one of several options being looked at. We would have been negligent not to look at it. But it is the least attractive option."

We would be talking about substantial sums of money to buy not very much."

A spokesperson for the business secretary declined to rule out nationalising the company but said the government had "no plans" to do so.

"We're working across government in partnership with trade unions and businesses to secure a green steel transition that's right for the workforce, represents a good investment for taxpayers and safeguards the future of the steel industry in Britain," the spokesperson said.

A British Steel spokesperson said: "We are in ongoing discussions with the government about our decarbonisation plans and the future operations of our UK business. While progress continues, no final decisions have been made."