UNIONS last night reacted with dismay to reports of a possible Corus buy-up involving controversial Indian businessman Lakshmi Mittal.

Corus, which employs about 3,600 workers on Teesside, is said to have been in informal talks with Mr Mittal's LNM group over the sale of some of its UK operations.

LNM is seeking to expand its UK market share and its options could include a takeover of one or more of Corus's most efficient plants, with works at Teesside a possible target.

Both parties have tried to scotch the rumours with an LNM spokesman saying: "Chief executives of steel companies talk to each other regularly but we cannot comment on whether there has been any specific contact with Corus."

Tony Poynter, chairman of the Teesside multi-union committee, said: "With the current uncertainty it is no surprise to get this kind of speculation. But if it is true, it would be bad news. Lakshmi Mittal has a reputation for taking on ailing companies and stripping them of their assets.

"It would make no sense for Corus to sell its assets to a competitor. It needs to keep all of its plants intact and move forward with help from the banks to do that."

Corus, formed in 1999 following a merger between British Steel and Dutch steel company Hoogovens, recently revealed annual losses of £412m in addition to its estimated £1.2bn debt.

It has announced plans to revamp its UK business in a bid to clear its debt, which has led to fears over jobs at the Redcar and Lackenby plants on Teesside.

Plans for a £543m sale of one of its aluminium subsidiaries were recently abandoned because of opposition from Corus's Netherlands-based supervisory board.

Jonathan Aylen, a senior lecturer at the University of Manchester Institute of Science and Technology and an expert on the steel industry, said he would not be surprised if Corus was talking to a "number of people" about disposing of some of its assets.

He said: "It is strapped for cash and needs to refinance its borrowing, so in the circumstances it is only natural.

"We do not know anything about Corus's future strategy and it could be that they want to specialise in certain product areas. Any steelworks which is a going concern is worth having and is definitely an attractive asset."