Minister Jonathan Reynolds makes major announcement after emergency recall of Parliament

Jonathan Reynolds confirmed the government plans to take control of British Steel to prevent its Chinese owner shutting down Britain's last virgin steelmaking facility.

The Business Secretary said he had been negotiating in good faith with Jingye, the Chinese firm, to keep open the Scunthorpe steelworks - which has Britain's last two operating blast furnaces capable of making non-recycled steel.

But the firm, he said had refused a deal presented by the government, and had planned to shut down the plant - and cancel and refuse to pay for future orders.

He said he believed Jingye's plan was to shut down the plant, and supply the downsream mills they also own with materials "not from Scunthorpe, but from ."

And he said in a counter offer, Jingye demanded the government pay "hundreds of millions of pounds to them without any conditions to stop that money ...being transferred to China."

"I could not guarantee that further requests for money would not have been made," he added.

Mr Reynolds said nationalisation of British Steel was still on the table - but that the government "must act today."

The bill to be put before MPs today will give Business Secretary Johnny Reynolds the power to take control of British Steel - the Scunthorpe plant itself, and downstream mills operated by the firm. It does not take the firm into full public ownership - though a change of ownership is likely at this stage.

The 10-page Bill allows the Government to instruct steel companies to keep assets running, and to take over those assets if they fail to comply with those instructions. It also provides for a compensation scheme for costs incurred by a company following the Government's instructions, and criminal sanctions for executives who disregard them.

Ministers still hope to find a commercial partner to take on the plant and guarantee its future, but nationalisation is still on the table if one can't be found. As well as Mr Reynolds directing staff to keep the blast furnaces operating, the government will pay for the raw materials needed to keep them lit.

Owners Jingye - which estimates the facility is losing around £700,000 a day - had failed to buy the coal needed to keep the fires lit, putting Britain's last two blast furnaces at risk of 'going cold.'

Speaking to Sky News on Saturday morning, industry minister Sarah Jones suggested negotiations with Jingye on saving the plant had broken down, accusing the company of failing to act "in good faith". She said: "This problem has now become existential because the company have refused to bring in the raw materials that we need to keep the blast furnaces operating.

"If blast furnaces are closed in an unplanned way, they can never be reopened, the steel just solidifies in those furnaces and nothing can be done.

"So the choice that is facing MPs today is do we want to take back control, to give the Business Secretary the power to act as a company director and to instruct the company to ensure we get the raw materials and we keep the blast furnaces operating, or do we want to see the end of primary steel making in this country and the loss of jobs?"

Saturday's emergency legislation will also provide for criminal sanctions if executives fail to comply with instructions to keep the blast furnaces open. Ms Jones said the Government would "step in" if British Steel's owners did not co-operate, with the company "liable for any costs that we incur".

She added: "We have the £2.5 billion fund for steel which we had in our manifesto, that we will use if necessary, so there will be no extra costs to the Exchequer that we don't already have in our plans."

Jingye, which bought British Steel in 2020, has said it invested more than £1.2 billion to maintain operations amid ongoing production instability and "significant" financial losses of around £700,000 a day. The proposals to close Scunthorpe's furnaces had sparked fears of job losses at the plant, which employs thousands of people.

Business Secretary Jonathan Reynolds said Jingye had confirmed the plans despite months of talks and a £500 million co-investment offer from Government, leaving ministers "no choice" but to act to spare job losses and save the plant.

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Ministers hope to secure private investment to save the plant in the longer term, but Ms Jones admitted on Saturday that there were currently no companies willing to make an offer.

Saturday's legislation is intended to provide an urgent temporary solution in the face of the threat to close the blast furnaces at Scunthorpe until a longer-term plan is agreed, and full nationalisation remains an option.Unions welcomed the move but Tory leader accused of having "bungled the negotiations" and said "their incompetence has led to a last-minute recall of Parliament".

Liberal Democrat Sir Ed Davey called the debate an opportunity to advance "a serious plan for the sustainable future of domestic steel production" while Reform UK leader reiterated his backing for nationalisation.

The Commons began at 11am and the House of Lords will sit from midday in the first parliamentary recall on a Saturday since 1982, when MPs returned after the start of the Falklands War.