A NEW hope has emerged for the future of British Steel on Teesside after a Chinese steelmaking firm has entered into advanced discussions.

Tess Valley Mayor Ben Houchen met Li Gampo, chairman of steelmakers Jingye, at Scunthorpe on Friday, November 1.

Mr Houchen said: "Chairman Li of the Chinese steel company has stated his interest in buying British Steel.

"Now the deal with the Turkish pension fund seems to have slowed down, it is fantastic to hear the plans Chairman Li has for British Steel, he seems extremely excited to make an investment. There is still a way to go and conditions to meet, but it looks like there is another buyer. It looks extremely positive for Teesside as well as Scunthorpe.

"I look forward to working with Chairman Li and his team in the coming weeks. There is still life in British Steel, and it looks like we are onwards and upwards from here. Great news."

Jingye were one of the other bidders during the process a matter of weeks ago, but are now the front runners to buy the business.

British Steel went into liquidation in May, putting 5,000 direct jobs at risk, and up to 20,000 more among suppliers.

Chris McDonald, chief executive officer of the Teesside-based Materials Processing Institute, said:”British Steel is a vital component of the UK economy, which not only supports many more supply chain jobs, but is important to the defence sector and in the creation of a low carbon economy. Strong and decisive action is needed to produce a solution quickly, either in the form of a new buyer or putting together a new deal.”

Workington’s TSP Engineering, based at Derwent Howe, is a wholly-owned subsidiary of British Steel, but operates as a separate business.

John Coughlan, chief executive of TSP, said: “We understand negotiations are carrying on positively and we are fully behind British Steel, which is also a customer of ours.

“We want to see them survive to see our business grow – it is business as usual here.”

The Unite union has called on business secretary Andrea Leadsom to guarantee the Government’s continued support for British Steel and honour previous commitments on research and investment necessary to facilitate the smooth sale of the steelmaker.

British Steel was put into compulsory liquidation in May after talks between previous owner Greybull and the Government collapsed, leading the business to be run by the Official Receiver.

Leader of Redcar and Cleveland Borough Council, Councillor Mary Lanigan said: "We welcome the ongoing discussions with parties who are interested in the British Steel business."