British Steel talks continue as firm promises staff will be paid for this month

British Steel is still in talks with the government over a proposed cash injection designed to save it from collapse, business minister Andrew Stephenson said this afternoon.

Read more: MPs face calls to save British Steel jobs as it edges closer to collapse

The firm, which was today forced to assure that its employees’ salaries would be paid in full for this month, has for the last week been lobbying the government for a £75m cash injection to help it address “Brexit-related issues”.

It remains unclear whether the money will be forthcoming, but Stephenson told the Commons the government “will leave no stone unturned” in its support for the company and the steel industry at large. “We recognise that global economic considerations continue to be challenging for the industry.”

British Steel, the UK’s second-largest steel maker behind Tata, employs around 5,000 people at its Scunthorpe steelworks and various other sites, supporting about 20,000 more jobs indirectly in its supply chain. Unite union said the company going bust would be an “economic catastrophe”.

A British Steel spokeswoman said it was in “live negotiations” with stakeholders to consider different funding options. “We are aware of speculation that the May salaries may not be paid. For the avoidance of doubt, we can confirm that funding is in place and British Steel employees will be paid their salaries in full.”

Opposition Labour leader Jeremy Corbyn said the government should be ready to nationalise the company if necessary to save it from collapse. “It needs support, not a death warrant,” he said.

“If an agreement cannot be struck with British Steel, the government must act to take a public stake in the company to secure the long term future of the steelworks and protect peoples' livelihoods and communities.”

Labour MP for Scunthorpe Nic Dakin said given that talks could have collapsed last week it was “actually quite positive” that they were still happening. He told CityAM the government was guilty of being “asleep at the wheel” in the past to let it get to this stage, “but at the moment, they are trying very hard to resolve this crisis”.

Read more: Troubled British Steel braces for insolvency in last-ditch loan talks

The pressure is mounting on Greg Clark and his department to find a solution to the problem in the coming days, but ministers may be hesitant to hand over funding given that little over a three weeks ago they gave the firm £120m to pay an EU carbon emissions bill, which helped it dodge a fine of more than £600m from the bloc.