British Steel is launching a consultation that could see the closure of its two blast furnaces at Scunthorpe, in England, putting up to 2,700 jobs at risk out of a workforce of 3,500.
The company said the blast furnaces were "no longer financially sustainable" due to tough market conditions, the imposition of tariffs and higher environmental costs.
The BBC understands British Steel was expecting a £1bn injection of government money to keep the business going, but was offered £500m.
The Prime Minister’s official spokesperson said the government had made a "generous offer" to British Steel and it would continue to work with the company and its Chinese owner Jingye to secure its future.
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