UNION leaders are set for talks with the Government on the future of British Steel after reports that it faces insolvency within days if a deal cannot be struck.

Britain's second-largest steel producer is on the brink of collapse putting thousands of jobs at risk, Sky News reported on Monday evening.

The firm employs thousands of workers, including 700 across sites in Lackenby and Skinningrove, which are understood to be some of the firm's most profitable plants.

The Northern Echo understands the Department for Business, Energy and Industrial Strategy will met with British Steel bosses this morning.

The meeting centred around concerns that Greybull – the private equity firm who own British Steel – are unwilling to put any capital into the company.

Unite union said it would be speaking to Business Secretary Greg Clark first thing on Tuesday and urged British Steel owner Greybull to find a solution.

A North-East British Steel worker has told the Echo they are "in the dark" about the firm's future, but said "bad management" and "spending money the company doesn't have" were reasons behind the current crisis.

A British Steel spokeswoman said: “The British Steel Group has faced various trading challenges recently. In response to this, we have been working closely with our stakeholders to consider the different funding options available to the Group.

“These negotiations have not concluded and we continue to work with all parties to achieve an outcome that secures the future success of British Steel.

“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.

“We do not want to provide any further comment on the live negotiations, other than to thank our entire team for their dedication and hard work during this challenging period.”

Redcar MP Anna Turley said: “My immediate thoughts are with the workforce and their families who are having to live day to day not knowing what is going to happen with their jobs and livelihoods.

“We’re now on the brink of a potential administration for British Steel and without government action there is a very real danger of another devastating closure.

“The government must now intervene to secure the assets and protect the workforce before irreparable damage is done to this strategic British industry.

“This crisis has been caused by uncertainty from chaotic Brexit negotiations and the absence of a national strategy for steel to give the level playing field the industry has been repeatedly calling for.

“Government must step up and do its duty to this key British industry and its workforce.”

A spokesman said: "We would urge Greybull to reach a deal with the Government. Thousands of jobs depend on the outcome.

"And we will be speaking with the Government first thing in the morning."

Business Minister Andrew Stephenson says he cannot comment in detail on the help the Government is willing to give British Steel but it will leave "no stone unturned" to support the industry.

Middlesbrough MP Andy McDonald said the reports were "deeply worrying".

He added: "Just when we thought the position had been stabilised we hear this.

"Hopefully a deal can still be struck. British Steel made it clear to me yesterday that the spectre of a No Deal crash out of the EU is hurting them very badly." 

Ms Turley added: "For Nigel Farage Brexit is just another way of sustaining his media career, while for members of the Cabinet it is all about who can win their party’s leadership contest by offering the most extreme form of separation from the EU.

"But on Teesside and in Lincolnshire and in so many other places a world away from Farage’s rent-free Chelsea pad or the cabinet’s grace-and favour apartments, Brexit is threatening people’s jobs and futures.

“If British Steel falls into administration we face losing substantial capacity from a strategic industry. Even more importantly, thousands of skilled working people face uncertainty about their future. It is not acceptable for ministers to allow the crisis to go on and on while they fight it out over who gets to be Prime Minister.

“Now that we know that Brexit is threatening our industrial capacity, our skills base and the prosperity of thousands of people it is only fair and democratic that the public decide if they want it to go ahead. With Westminster unable to decide and thousands of jobs threatened by the deadlock, a People’s Vote is the only solution.”

Last week it announced it had the backing of its key stakeholders and that operations would continue as normal.

The company had asked for a package of support to tackle Brexit-related issues and has been holding talks with the Government, raising fears for the future of the company, which employs more than 4,000 workers, mainly in Scunthorpe.

It said on Thursday: "We are pleased to confirm that we have the required liquidity while we work towards a permanent solution."