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Production was halted at Speciality Steel's sites in Rotherham (pictured), Stocksbridge and Wednesbury earlier this year A plan to nationalise the UK's third-largest steelworks is being developed by the government, MPs have been told.
Business Secretary Jonathan Reynolds told the House of Commons ministers were looking to acquire Speciality Steel UK (SSUK), which has sites in Stocksbridge and Rotherham in South Yorkshire and Wednesbury in the West Midlands.
The government initially took control of SSUK, previously part of Liberty Steel, last year after it was forced to liquidate by the High Court.
Reynolds said a bidder had come forward earlier this year, but the government had decided against supporting it, citing "serious concerns" over the proposed financing of the deal and "protections for UK taxpayers".
Ministers had therefore decided that the government would plan its own formal acquisition of the business, he explained. Production at the business, which employs about 1,300 people, was paused several months ago, with staff put on furlough on reduced wages.
Business secretary Jonathan Reynolds said he wanted to "secure a bright future" for steelworkers and their families Reyno lds told the Commons: "Having concluded that we cannot support the preferred bidder's proposal, we are faced with a choice.
"We can allow events to take their course through the liquidation process and risk being left with no say in the future of these sites, or we can act. "We will therefore engage with the official receiver sale process and develop a proposal for the public acquisition of SSUK.
"This will preserve strategic control and ensure that all credible future opportunities can be properly considered before irreversible decisions are taken." Future decisions and spending commitments relating to the business would be "subject to detailed due diligence and funded from existing government budgets", Reynolds said.
He added: "Working towards public acquisition will create the necessary time and space to undertake a full assessment of the opportunities available.
"It will let us consider future industrial use, regeneration opportunities and the role that specialist manufacturing capabilities could play in supporting growth and our national resilience." In a message to workers, he said: "I will do all I can to secure a bright future for you, your communities and your families." L isten to highlights from South Yorkshire on BBC Sounds , catch up with the latest episode of Look North .
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