THE Government has agreed to provide financial support to British Steel potentially worth hundreds of millions of pounds, paving the way for a deal to secure the company's immediate future.

Although no deal has been finalised, The Northern Echo understands the Government has agreed to provide a £300m package of support to British Steel.

This would give Turkey's military pension fund Ataer Holding a formal period of exclusivity within which to complete a takeover of the UK's second-largest steel producer, which employs thousands of people across the UK, including 700 in North-East sites at Lackenby and Skinningrove.

Tees Valley Mayor Ben Houchen said: "The package, which is yet to be finalised, includes a mix of grants, indemnities and loans. According to reports, this is expected to pave the way for Ataer Holding to acquire the whole of British Steel. Through its subsidiaries, Ataer produces flat and long steel and iron products.

"The formal announcement is still likely in the next few days. A further 6-8 weeks of due diligence is still needed before any deal is signed off and agreed.

"For the avoidance of doubt, the sales process is still ongoing and bids are still being assessed. However today’s reports show that it’s likely British Steel will ultimately be saved and Government is stepping up to the mark to save jobs.

"There is still more work to be done and I will update people when more information when I can. In the meantime, let’s keep up the fight."

Redcar MP Anna Turley said: “The government, the official receiver and the wider British Steel Support Group and the trade unions have been committed to leaving no stone unturned in the search for a buyer for British Steel. The priority has been finding a solution which guarantees a long term future for the business in its entirety and supports the wider British steel industry.

“I have been clear that government needed to step up and offer whatever financial and other support was required to pave the way for a successful deal and so this reported support package is welcome news. In 2015 when the SSI works in Redcar fell into liquidation government immediately stepped away, so I am relieved that lesson has been learned.

“We now need to ensure, at this crucial stage, that the expected deal is taken over the line and that it will lead to a positive outcome for the business, its workforce, and the wider industry.

“The details will be critical but I expect any company getting government support to have a strong proposal which will invest in the assets, provide good terms and conditions for the workforce, support training, research and development and be committed to the local communities in which they will be based. All of the members of the British Steel Support Group will be working to ensure this happens.”

British Steel went into liquidation in May after talks with the Government collapsed.