Liberty Steel plants in Rotherham and Sheffield under threat

Liberty Steel is making a last-ditch attempt to save its plants in and around Rotherham and Sheffield from collapse.

On Wednesday, a court could force Liberty's speciality steel business to close over unpaid debts, putting 1,450 jobs at risk, unless the company wins an adjournment.

Liberty Steel told the BBC that discussions continue with creditors and that it ''understands the concern this will create for colleagues''.

It added that it ''remains committed to doing all it can to maintain the speciality steel business".

Government sources told the BBC they are not prepared to step in to save Liberty or any of its subsidiaries to pay off outstanding debts.

However, the government may look at stepping in if the company is forced into insolvency by the courts.

Creditors, including Harsco Metals, have petitioned the court to force the company into liquidation so that Liberty's assets can be sold to pay the money it owes.

The court could order Liberty Steel to be wound up.

One creditor, who owns a company that has worked with Liberty Steel and the plant's previous owners over several years, told the BBC: ''Of all the owners of this plant we've worked with, Liberty Steel is the worst. You don't know if you're going to be paid from one day to the next.''

He said he was owed tens of thousands of pounds by Liberty Steel and the debt is putting jobs at risk at his company.

He said he ''totally understands'' why the government might not want to support Liberty Steel financially, adding, "I hope new owners can be found with the wherewithal to run this company properly."

Sarah Champion, the Labour MP for Rotherham, said the situation at Liberty Steel was ''deeply troubling'', adding that the Liberty plant was critical for speciality steel in aerospace, defence and Formula One.

''I have repeatedly urged the government to take all necessary steps to safeguard the plants themselves and the workforce," she said. "I will continue to do all that I can to protect steel production in Rotherham."

Roy Rickhuss, general secretary of steelworkers' union Community, said its members had "endured far too much turbulence and uncertainty over recent years" at the plant "as a result of the erratic and irresponsible way the company has been run".

"Failed restructuring plans and broken promises from the company have become a familiar, demoralising pattern, and things simply can't go on as they are," he added.

Mr Rickhuss said new "responsible" ownership was needed to secure the plant's future. "Enough is enough - (Liberty Steel boss) Sanjeev Gupta must invest in the business or step aside," he said.

Last month, the government took control of British Steel in Scunthorpe after being given the power to do so by an emergency vote in Parliament.

It is now in charge of the day-to-day running of the plant to ensure the supply of coal necessary to keep its blast furnaces going.

The government says its looking for a commercial partner but that nationalisation of the plant is the most likely option.

A Department for Business and Trade spokesperson said: "We continue to closely monitor developments around Liberty Steel, including any public hearings, which are of course a matter for the company.

"It is ultimately for Liberty to manage commercial decisions on the future of its companies, and we hope it succeeds with its plans to continue on a sustainable basis."

British Steel says it has faced significant challenges due to rising energy costs and an over-reliance on cheap imports and said it would take time to deliver the improvements necessary to make it competitive.

In November last year Liberty Steel sought court approval for a restructuring of its speciality steel UK division to reduce its liabilities but said last week that it had failed to reach an agreement with creditors.