Race against time to save British Steel plant as minister refuses to make guarantee

Government officials are on site at the British Steel plant in Scunthorpe in a desperate race against time to keep the furnaces burning.

Business Secretary Jonathan Reynolds said an emergency takeover had given ministers a "fighting chance" of keeping the plant - which employs 2,700 people - open. But he refused to guarantee vital raw materials would arrive on time despite the landmark action.

The Royal Navy is understood to be on alert to escort a vital shipment of coking coal - which is essential to keep the furnaces running - the US. If this does not happen on time, the two furnaces would burn out.

Pressed on whether British Steel will secure the materials needed before the furnaces cool, he said: "We've taken action to give us the chance to do that. The situation we have taken on is a challenging and difficult one."

On Saturday MPs were recalled to pass emergency legislation to save the plant. Mr Reynolds said: "If we hadn't acted, the blast furnaces were gone, steel production in the UK, primary steel producing, would have gone. So we've given ourselves the opportunity, we are in control of the site, my officials are on site right now to give us a chance to do that."

He has accused Jingye, the Chinese owner of British Steel, of refusing to purchase materials like coal - saying its plan was to shut the furnaces. Without these the furnaces will cool to the point where it is not viable to save them.

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The Business Secretary said "all was lost" if the Government had not intervened. He stated that the Government had decided to take emergency action after discovering Jingye, had not only stopped ordering more raw materials, but begun selling off the supplies it already had.

He said the company rejected an offer of support worth around £500million - demanding more than twice that sum with few guarantees the blast furnaces would stay open. Mr Reynolds admitted that the Government expects to lose money after taking over leadership of the stricken company - but said failure to act would come at a far greater cost.

The frontbencher said British Steel lost £233million a year in its last accounts. But he continued: "I would ask the public to compare that to the option of spending a lot more money to reach a deal that would have seen a lot of job losses and Jingye remain as a partner. Or the cost of the complete collapse of British Steel, easily over £1 billion in terms of the need to respond from Government, to remediate the land, to look after the workforce."

But he declined to claim the Chinese Communist Party (CCP) was orchestrating efforts to sabotage the business. Despite Jingye's links to the CCPMr Reynolds said he was "not accusing the Chinese state of being directly behind this".

He said: "To run a major Chinese industrial company, there are always direct links to the Chinese Communist Party. You wouldn't be allowed to run a company in without that kind of thing.

"I'm not accusing the Chinese state of being directly behind this. I actually think they will understand why we could not accept the proposition that was put to us, in terms of losing that essential national capacity. So I'm not alleging some sort of foreign influence."

But he did agree there is now a "high trust bar" to bringing Chinese investment into the UK, and said he would not have allowed a Chinese company to invest in the "sensitive" steel sector.

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