The government is considering options for Tata Steel's Port Talbot plant, including a possible management and workforce buyout.
BBC sources said the unions and bosses have already come up with a turnaround plan for the plant, and that there have been extensive talks between the government and ministers.
Government sources have said those involved in the plant should be given the chance to see if they can secure the funding to keep it going. "It is the role of the government to intervene when a vital economic interest is at stake," a source told BBC assistant political editor Norman Smith.
The BBC also reported that the government is looking at offering loan guarantees to potential buyers and much tighter rules on procurement to ensure major British projects are obliged to buy British steel.
The Labour party has led calls for the government to intervene. Labour leader Jeremy Corbyn said: "Ministers must act now to protect the steel industry and the core of manufacturing in Britain.”
Union leaders and Labour MP Stephen Kinnock, whose Aberavon constituency includes the Port Talbot plant, travelled to Mumbai to persuade Tata to keep making steel at British plants including Port Talbot. However, a restructuring decision was made that could also affect workers at plants including Rotherham, Corby and Shotton.
Tata said trading conditions had "rapidly deteriorated" in the UK and Europe due to a global oversupply of steel, imports into Europe, high costs and currency volatility.
"These factors are likely to continue into the future and have significantly impacted the long-term competitive position of the UK operation," it said. Therefore finding a buyer may not be easy.
In an earlier joint statement the UK and Welsh governments said: "We remain committed to working with Tata and the unions on a long term, sustainable future for British steel-making.
"Both the UK and Welsh governments are working tirelessly to look at all viable options to keep a strong British steel industry at the heart of our manufacturing base.”
Plaid Cymru leader Leanne Wood said her party wants the Welsh Assembly to be recalled to discuss the crisis – a call that was echoed by Welsh Conservatives leader Andrew Davies.
Tata Steel has been operating in the UK since 2007 when it bought Anglo-Dutch steelmaker Corus.
In January the company announced more than 1,000 UK job cuts, including 750 in Port Talbot, where it employs 4,000 staff and a further 3,000 contractors and temporary workers. Last October it revealed that nearly 1,200 jobs would go at plants in Scunthorpe and Lanarkshire.
All information was correct at the time of going to press. We will endeavour to update this story with more information as it is released.
