British Steel plans to axe hundreds of jobs at its Scunthorpe plant, according to reports which come as ministers consider a multimillion-pound rescue package for the struggling business.

Sky News reported that the business could approach unions on Wednesday about a plan which could see around 800 workers made redundant.

The redundancies would focus mainly on the plant in Lincolnshire. British Steel employs around 4,000 people across the UK.

The talks with unions could be delayed amid negotiations with Government, which is reportedly considering cash injections into both British Steel and Tata Steel UK.

British Steel declined to comment when asked about the potential cuts.

Last month the Financial Times reported that Chancellor Jeremy Hunt was close to signing off on the support package, which could funnel around £300 million to British Steel, with an “equivalent” sum going to Tata.

But it is unclear what the latest threat of redundancies could mean for this negotiation.

Ministers had reportedly demanded that the companies had to protect jobs if they wanted the Government handout.

The funding is reportedly also set to be linked to decarbonisation efforts from the steel giants. It will help to replace British Steel’s blast furnaces with electric alternatives, officials hope.

Once a giant of British manufacturing, the business has struggled over the past decade.

China’s Jingye Group became the manufacturer’s third owner in four years when it bought British Steel out of insolvency in 2020. But now Jingye thinks it needs taxpayer funding to keep the doors open.

Alun Davies, national officer at the steelworkers’ union Community, said: “We are extremely concerned about the reports that British Steel is looking to cut hundreds of jobs.

“This move would represent a betrayal of their loyal workforce and their commitments to invest in the business. We believe this would put staff at risk and is completely unworkable.

“British Steel is already putting staff at risk by making them work overtime every single week. Cutting hundreds of jobs in this situation will endanger workers by pushing them to work even longer hours in extreme temperatures.

“Steelworkers played their part to protect our steel industry and are being failed by both the Government and British Steel who are abdicating their responsibilities to the workforce and our country.

“British Steel should urgently clarify its position and know that we will use any means at our disposal to fight this dangerous plan.”

The Prime Minister’s official spokesman said: “Any reports of prospective job losses would be of concern. I can’t necessarily comment on speculation but the Government always stands ready to provide or signpost assistance for anyone who needs it.

“In terms of long-term support for UK steel, this is a Government that has taken a number of steps in this space.”