Speculation is growing that Tata will retain its British steel business and abandon the sale process it launched in March.
The company invited bids for its strip steel division based around the Port Talbot plant after Tata’s main board in India refused to back a turnaround plan.
Business Secretary Sajid Javid said he persuaded Tata not to shut the loss-making business immediately and instead seek a buyer.
Tata said it wanted a speedy disposal, with UK boss Bimlendra Jha saying the company could not keep “bleeding” money from the UK steel division.
Mr Javid said government was willing to take a 25pc equity stake and offer financial backing worth “hundreds of millions” to secure a deal.
The department for Business, Innovation and Skills (BIS) said that the offer - which it emphasised was on commercial terms to get round state aid rules - was open to all potential bidders, including those from Tata.
Last week government launched a consultation on controversial legal changes which would allow the massive Tata Steel UK pension scheme, which has a £700m deficit, to be separated from the business. Potential buyers had said the £14bn retirement scheme’s funding gap was a major hurdle to a purchase.
However, some elements in government are keen to see Tata keep hold of the business, as it would likely see a deal being sealed faster than a new buyer coming in.
Agreeing a package that meant Tata remained in control and saved the jobs of 11,000 steelworkers - along with at least twice as many positions in the supply chain - before the June 23 Brexit referendum would be a victory for Mr Javid.
Having been heavily criticised for his initial handling of the steel crisis that has seen at least 5,000 jobs lost in the industry, a quick agreement would shore up his position and allow him to move on with his reputation boosted.
As well as direct financial aid, it is understood government is considering reducing energy costs for the power intensive industry, as well as relief on onerous green levies and business rates.
Despite mounting speculation of an imminent announcement, one source close to Mr Javid dismissed reports of a government loan to Tata as “nonsense”.
Source:Telegraph