North-east England suffered a hammer blow yesterday when a steelworks was “mothballed” with the loss of 1,700 jobs — and at least 3,000 more will go in support industries.

Owners and unions at Thai-owned SSI steelworks in Redcar in Teesside appealed in vain for state help to overcome short-term financial problems, but the Tory government refused to intervene.

Unions renewed demands yesterday for ministers to act.

GMB national officer David Hulse said the union would do everything in its power to press the case for the government to step in and to protect workers and their families.

Community general secretary Roy Rickhuss insisted: “Steel-making on Teesside must have a future and our fight to save our steel industry will continue.

“The Prime Minister said his government would do ‘everything we can’ to support the UK steel industry. He needs to deliver on that. Now is the time to demonstrate the political will to see a vital foundation industry continue.”

Unite said the government must take some responsibility for the situation, as it could still intervene to save the plant and the thousands of jobs that rely on it.

Redcar Labour MP Anna Turley said: “It is now the government’s duty to step in and secure our steelworks. The plant is a national asset and must be rescued and protected.”

Speaking from the Labour Party conference, shadow business secretary Angela Eagle said the latest announcement from SSI showed how critical the situation in Redcar was, adding that, unless the government acted, 1,700 jobs would be lost.

TUC general secretary Frances O’Grady said: “Today’s announcement is a massive blow to the government’s northern powerhouse agenda and British industry.

“The future of British steel-making is at a crossroads.

“The Chancellor must provide more financial support for manufacturers in November’s spending review.

“If the government does nothing, plants like SSI will continue to close.

“British steel-making contributes over £45 billion to the UK economy and provides the kind of high-skilled labour we need to boost productivity. It can’t be allowed to wither on the vine.”