Parliament will be recalled on Saturday to pass an emergency law to save British Steel’s plant in Scunthorpe from imminent closure.
At a press conference, Sir Keir Starmer said the legislation would allow ministers to “take control” of the Lincolnshire plant, which employs 2,700 people.
The move stops short of fully nationalising the company at this stage, but the prime minister said “all options” remained on the table.
Talks have been taking place this week to keep production going at the firm, after its Chinese owner said its blast furnaces are “no longer financially sustainable”.
MPs left Westminster for their Easter break on Tuesday, and were not due to return until 22 April.
The House of Lords is also being recalled, with Sir Keir confirming the government wants to pass the legislation in a single day.
The prime minister added that the future of the company “hangs in the balance”.
Adding that steelmaking was “essential for our future”, he added: “our economic and national security are all on the line”.
The BBC understands that ministers are seeking immediate powers to control the site so it can ensure it has enough raw materials to keep going, with current supplies due to run out in the coming weeks.
After Easter, Parliament could then be asked to give the government the power to nationalise the company.
A No 10 spokesperson said the legislation would allow the government to “preserve capability and ensure public safety” at the site, the last place in the UK where higher-grade virgin steel is made.
Chinese company Jingye, which bought British Steel in 2020, says it has been suffering financial losses of around £700,000 a day.
The company announced plans last month to shed jobs at the Scunthorpe site, blaming “highly challenging” market conditions, tariffs and costs associated with lower-carbon production techniques.
The government offered to buy the coking coal to keep the blast furnaces running until a longer-term solution to saving the plant could be found, but was unable to get the company to agree to this in tense negotiations this week.
The business secretary is thought to have lost confidence in the company’s Chinese owners, with a government source saying they are “no longer trustworthy partners”.
Parliament was last recalled from a scheduled break in August 2021 to discuss the US withdrawal from Afghanistan.
The House of Commons has been recalled 34 times since 1948.
Conservative shadow Cabinet Office minister Alex Burghart said: “The recall – and its speed – is a sign the government has completely flunked its negotiations over British Steel.
“Parliament rose on Tuesday – Labour knew this was coming down the track and did nothing.”
Liberal Democrat leader Sir Ed Davey said “nothing should be off the table in this matter of national security” and added that the recall of Parliament should be seen as “an opportunity to come forward with a serious plan for the sustainable future of domestic steel production”.
Reform UK leader Nigel Farage said the situation in Scunthorpe was “desperate”.
He urged the government to “do the right thing… and bring it [British Steel] back into public ownership”.
