THE government is ready to part-nationalise Tata’s UK steel assets and offer hundreds of millions of pounds of taxpayers' money to a private buyer.

After initially ruling out the option of nationalisation the government has backtracked and will offer a sweetener in the hope that new owners can be found for Tata’s remaining steel assets, including its pipe-making mills in Hartlepool, after the Indian-owned company announced last month that it was pulling out of the UK.

It means Tata's troubled Port Talbot works will be offered the kind of support that David Cameron refused to give campaigners who tried last year to rescue SSI Redcar.

The Tata plan could involve the government taking a minority equity stake of up to 25 per cent in the steel plants, including Port Talbot in south Wales, amounting to part-nationalisation of the struggling industry.

Business Secretary Sajid Javid said the money would be offered on commercial terms, but the government would not take any control over the business.

Redcar MP Anna Turley, said: “I only wish Ministers had possessed the same commitment and determination last year by mothballing the blast furnace in Redcar and allowing time for the buyers interested in the profitable coke ovens to prepare bids. Instead industrial assets have been left to crumble and we have been left with huge clean-up costs.”

Mr Javid came in for criticism for failing to respond quickly enough to the steel crisis. He was away on a trade trip to Australia when Tata announced the withdrawal, which puts up to 40,000 jobs at risk.

He initially ruled out nationalisation but the government later backtracked and said all possibilities were still on the table.

Potential buyers have shown interest in buying Tata, which includes pipe mills in Hartlepool.

One option is a management buyout backed by the chief of Tata's Port Talbot factory, the UK's largest steel operation.

Steel company Liberty House, owned by Sanjeev Gupta, has also said it was interested in buying parts of the business.

Mr Javid said last week that the government was prepared to support a credible buyer with a finance package, including loans.

Tata has said that it would give the government and potential buyers time to arrange a rescue package, but that it did not want to prolong the uncertainty for customers and workers.