The Government has refused to confirm reports it has offered steel giant, Tata, multimillion pound loans if it stays in the UK.
The Indian firm announced its intention to sell its remaining UK steel operations in March, leaving around 11,000 jobs at risk.
Since then at least seven potential buyers are believed to have put forward bids for Tata to consider, but speculation has been growing that the company is considering putting the sale on hold.
Neither Tata nor the Department for Business, Innovation and Skills would comment on claims that the company was being offered state loans on "commercial terms".
But an industry source told Sky News it was no secret that "the Government is putting massive pressure on Tata in the effort to get them to stay".
The reports have led some to question, if true, why the Government would try so hard to persuade Tata to stay when Business Secretary, Sajid Javid, has reiterated on several occasions that just two months ago the company was planning to close all its UK steel operations with immediate effect.
Sources at the Port Talbot plant told Sky News they were worried that the company may look to prolong the sale process because steel prices were rising but when conditions worsened, jobs could again be at risk.
Meanwhile, Stephen Kinnock, Labour's MP for Aberavon said while in principle it would be good news if Tata decided to retain its UK strip products business it should be asked to provide the same guarantees for the future as other potential buyers.
He told Sky News: "The workforce would be forgiven for reacting with a degree of scepticism, and perhaps even an element of anger, to the news that Tata Steel had suddenly decided to recommit to its UK business."
He added: "If Tata Steel has indeed decided to retain ownership then it is essential that they bring forward guarantees that they are recommitting for the long haul.
"The company should provide detailed, cast-iron guarantees in terms of investment in plant, machinery, technology, skills, growth, job security and pension security. A long-term commitment to the two blast furnaces in Port Talbot should also be provided."
The situation has been further complicated by the fact that a Government consultation is currently under way into proposed legal changes that would slash billions of pounds from the liabilities of the British Steel pension scheme.
The idea was aimed at smoothing a potential sale after fears some prospective buyers were being put off by the £485m deficit being carried by the scheme. If passed it would mean 130,000 retired steelworkers would take a cut in their benefits.
Although Tata has refused to comment on the latest reports, just last week it said it was "actively reviewing all options for the Tata Steel UK Business including a potential sale of the business".
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