A MANAGEMENT buyout of Tata Steel would result in an additional 1,000 job cuts across the country, the bid team has confirmed.

Excalibur Steel is understood to be among at least five bidders to have expressed an interest in taking over the Indian firm's remaining UK steel assets.

Tata UK executive Stuart Wilkie, who is leading Excalibur's bid, is using a revised version of a previously rejected turnaround plan to buy the business which employs 11,000 people currently, including about 600 at pipe mills in Hartlepool and 4,000 at the Port Talbot works in South Wales.

It says the 1,000 job cuts are in addition to 1,000 announced by Tata before it put the business up for sale.

Excalibur wants 10 per cent of its funding to come from employees, including those in the management buyout team, and is also counting on support from the Government which has raised the prospect of taking a 25 per cent stake in the winning bid.

Its bid team is meeting banks to seek its own financing and hopes to have what it would need agreed by the end of next week.

Rival bidder Liberty House said that lay-offs weren't on the cards if its proposal is accepted.

Sanjeev Gupta, its chief executive, said that he's committed to sustaining all current jobs if the bid for Tata Steel UK is successful and will concentrate on re-training existing workers.

The Government has admitted that the issue of pension liabilities, believed to run into hundreds of millions of pounds, is a potential stumbling block to any deal.

Excalibur has made it clear that it would walk away if forced to carry the liability.

"We would expect the government in conjunction with the pension regulator, the company and trustees of the pension would close the pension scheme and make it secure," Mr Wilkie said, adding Excalibur would start a new pension scheme.

"If the liability for the pension was on the table, then everybody would walk away," he said.