The full nationalisation of British Steel is expected to be announced in the King’s speech this week, a year after the government took over the daily running of the loss-making business from its Chinese owner.

The steelmaker, which employs 3,500 people at its plant in Scunthorpe, came under government control last April amid fears that its owner, Jingye, was planning to shut down the site.

British Steel operates the last two remaining blast furnaces in the UK, but its economic control remains with the Chinese company, which bought it out of insolvency in early 2020.

An announcement confirming the plans is expected in the King’s speech on Wednesday, according to the Sunday Times, but details of the speech are still being finalised.

British Steel was bought by the private equity group Greybull Capital in 2016, but it collapsed into insolvency three years later. It was bought by Jingye in March 2020.

The Chinese company had planned initially to build an electric arc furnace at Scunthorpe and another at a site in Teesside, though negotiations with the government ultimately fell through. Jingye then sought to shut down the blast furnaces in April 2025.

Closure of the British Steel plant would have ended Britain’s primary steel-making ability as blast furnaces allow the metal to be made from scratch, rather than relying on scrap.

However, by the end of January this year the cost of keeping British Steel running had risen to £377m, and could exceed £1.5bn by 2028 if it continues at its current rate, according to estimates from the National Audit Office.

The company has attracted interest from potential buyers, with the Miami-based retail investor Michael Flacks having declared himself “very” interested in buying it in February.

Earlier this month, Sev.en Global Investments, the owner of the UK’s largest electric steelworks, suggested the government should find a single buyer for British Steel and Speciality Steel UK, a move that would create the country’s biggest steelmaker.

Although the sector is much smaller than its peak in the 1970s, British Steel is still an important employer in Scunthorpe and supports tens of thousands of jobs in the extended steel supply chain. Network Rail sources about 95% of its track from the plant.

The original British Steel was formed in 1967, when Harold Wilson’s Labour government nationalised more than a dozen private companies to create one of the biggest steel producers in the world.

It was privatised by Margaret Thatcher’s government and broken up, but its latest incarnation struggled with high costs and competition from abroad.

A government spokesperson said: “We’ve been clear that safeguarding UK steel making is our priority. We’re continuing discussions with Jingye to agree a pragmatic and realistic solution to secure the long-term future of the Scunthorpe site. Discussions are ongoing and no conclusion or decision has yet been reached.”