Some of the biggest workers' unions in the UK are warning the confirmation that steel firm Caparo Industries is to go into administration, with as many as 1,800 jobs being at risk, could have a "domino effect" in the industry.
Administrators from PricewaterhouseCoopers (PwC) have been brought in to oversee parts of Caparo, which is based in the West Midlands town of Oldbury, after the company became severely affected by the collapse in the market price of steel again the euro.
The crisis at Caparo is the latest blow to the British steel industry following on the closure of SSI in Redcar with the loss of 2,200 jobs and the expected announcement from Tata of severe job losses.
The TUC has said problems at the centre of the steel industry are so severe, as many as one in six steel workers now face the prospect of losing their jobs and at this rate "there won't be a British steel industry in a year's time".
TUC general secretary Frances O'Grady said: "Ministers cannot afford to stand on the sidelines and watch this crisis unfold. They must step in now with a rescue package. From solar to steel, the government's lack of industrial strategy is costing the UK dear.
"If David Cameron and George Osborne don't up their game, more firms will go to the wall. They must provide emergency financial support in next month's Spending Review. And they must urgently raise with the Chinese president the devastating impact Chinese steel dumping is having on British manufacturers."
'Hammer blow for steel'
Britain's largest union, Unite, is also renewing calls for the government to urgently step in and take action to stop the "dumping" of cheap Chinese steel, help with high energy costs and ensure "major infrastructure projects use British steel".
Tony Burke, Unite assistant general secretary for manufacturing, said: "This is yet another hammer blow for steel and manufacturing communities across the UK already reeling from the closure of Redcar and job losses at Tata Steel.
"Our members at Caparo Industries are highly skilled and work hard to produce world-class products. We believe that the company has a future. Unite will be working with Caparo's administrators and doing everything in our power to save jobs.
"Government ministers need to ask themselves how many more steel firms need to go to the wall before they step in and support the UK's steel industry? Failure to act urgently could lead to a 'domino effect' taking hold across the industry, leading to the loss of yet more skilled jobs as firms buckle under a combination of steel 'dumping' and high energy costs.
"The government's 'March of the Makers' and 'Northern Powerhouse' will become meaningless rhetoric, if it fails to act swiftly and the livelihoods of thousands of people left in tatters."
Matt Hammond, from PwC, said: "We will be rapidly assessing all options for the businesses through this week and beyond. The impact of steel prices and exchange rates has had an impact on some parts of the Caparo Industries group. However there are businesses in the group that are not directly affected by steel prices, and likewise many where there is both strong customer demand and critical supplier support.
"Our focus for the next 36 hours is on briefing staff across the group and working closely with their management teams to ensure that every opportunity for these businesses is considered. We will be working with all parties to ensure the best outcome for all creditors of each business."