Ministers favour merging all UK steel companies into one

UK says British Steel's Chinese owners demanding millions

UK's third-largest steelworks collapses into government control

Why did the government take control of British Steel?

There are six steel companies in the UK, four of which are currently being financially supported

It's understood that the preference inside the Department for Business and Trade (DBT) is to find a joint buyer, rather than nationalise the companies.

Any future plan would need the backing of the current owners, but it's understood ministers have told the sector they believe a merger is the best way to be sustainable in the long-term.

The UK's steel industry has faced major financial difficulties in recent years due to high energy prices, increased tariffs and a glut of steel in the global market.

Ministers are already searching for buyers for two steel companies and another has been publicly owned since 2021.

The UK wing of Liberty Steel in South Yorkshire collapsed into government control last month after insolvency courts granted a compulsory winding up order.

Speciality Steels UK (SSUK), part of the Liberty Steel metals empire of controversial tycoon Sanjeev Gupta, was placed in the hands of a government appointed liquidator last month and ministers have agreed to cover the ongoing wages and costs of the plant while a buyer is sought.

It's understood that a number of commercial buyers have already approached the government about taking over SSUK, which has already transitioned to greener electric arc furnaces.

Ministers took control of British Steel in Scunthorpe in April after accusing the Chinese owners Jingye of trying to close down the site's blast furnaces.

The search for a new buyer for British Steel has stalled in recent months after Jingye unexpectedly asked for a sum in the hundreds of millions to hand over ownership.

There is some concern within government that finding a buyer for British Steel may be more difficult, given the site uses old-fashioned blast furnaces.

Tata Steel, in Port Talbot, was given a £500m government rescue package last year to help the company move to greener forms of steelmaking.

Sheffield Forgemasters was nationalised

A senior

"We needed Jingye off the board, we are very close to doing that. We needed Gupta off the board, we've done that."

The

The government is understood to have told the steel sector that even without a shared ownership model, the companies will be expected to work together much more closely in the future.

Ministers have always maintained that full nationalisation for any steel company is not the government's preference and the