Business Secretary Peter Mandelson has said Corus should seek legal action to reinstate its agreement with buyers and keep its Redcar plant open.

He expressed strong concern that unilateral termination of the Offtake Framework Agreement by Marcegaglia, Dongkuk Steel Mills, Duferco and Alvory.

Mr Mandelson said: "It is essential that Corus does everything it can legally, and with the Government's assistance, to reinstate the Offtake Framework Agreement. "It is unacceptable that such a development should threaten jobs on such a scale, with such a potentially devastating impact on the area.

"The Government stands ready to do what it can to support the company. We are not prepared to reconcile ourselves to inevitable closure of this plant."