LABOUR has been urged to renationalise British Steel if a deal cannot be reached to secure the business and protect thousands of jobs.

Chinese owners Jingye began consulting on Thursday over plans to close its Scunthorpe site’s two blast furnaces as early as June.

The company has reportedly rejected a £500 million government offer to help its transition to a greener form of steel production with a new electric arc furnace.

Steel union Community assistant general secretary Alasdair McDiarmid said: “British Steel is a business of huge strategic importance, not just to the local economy and the wider steel sector, but to the country as a whole.

“If a deal can’t be reached with Jingye, then the government must move to nationalise the business.

“This government cannot afford to renege on the commitments it has made to steelworkers, and it is unthinkable that they would allow Britain’s primary steelmaking capacity to die on their watch.”

Reform UK has also urged ministers to renationalise British Steel, stealing a march on Labour.

A Momentum spokeswoman said: “While the government is willing to leave key strategic sectors of the British economy in the hands of private monopolies, it cannot seriously arrest our country’s national decline, and is opening up space to be attacked by the far right.

“Public ownership is central to Labour’s history and values, and should be the centrepiece of any progressive movement.”

UK Steel director general Gareth Stace said: “All options should be on the table, and we need a secure future for our steel industry.”

Business and Trade Secretary Jonathan Reynolds said: “I know this will be a deeply worrying time for staff and while this is British Steel’s decision, we will continue working tirelessly to reach an agreement with the company’s owners to secure its future and protect taxpayers’ money.”