Reynolds discusses British Steel row with Chinese counterpart

Jonathan Reynolds, the business secretary, has discussed the government's move to seize control of British Steel with his Chinese counterpart for the first time.

Sky News understands that the fate of the Scunthorpe-based steelmaker was raised during talks this week between Mr Reynolds and Wang Wentai, China's commerce minister, on Monday. A subsequent post on social media by Mr Reynolds confirming the meeting said the pair "discussed deeper UK-China cooperation - especially in services, investment and WTO reform - and building on January's successful Economic and Financial Dialogue to drive mutual growth".

Money latest: Are premium bonds worth it? The business secretary did not refer to British Steel in the post, although officials confirmed that the company was raised briefly during their meeting. It came days after Sky News revealed that British Steel's Chinese owner had hired the leading City law firm Linklaters to explore the recovery of hundreds of millions of pounds it invested in the Scunthorpe-based company before the government seized control of its operations in April.

Linklaters advised Jingye Group on its purchase of British Steel in 2021. British Steel's balance sheet bears debts worth close to £1bn, most of which is said to be owed to Jingye in the form of inter-company loans.

The government and Jingye had been at loggerheads for weeks over the future of the Scunthorpe plant's blast furnaces. Since Mr Reynolds, the business secretary, moved to commandeer control of the UK's second-biggest steel producer, the government has sourced additional supplies of raw materials to ensure the furnaces' continued operations.

Jingye had been preparing to close them - with the loss of thousands of jobs - after seeking £1bn in state aid to facilitate the site's transition to greener steelmaking. Politics latest: Spending review announcements and reaction Mr Reynolds has indicated that Jingye's shares in British Steel - which has not yet been formally nationalised - are worthless, and that the government does not intend to offer to pay to acquire them.

A spokesman for the Department for Business and Trade said: "We are working closely with Jingye and a range of third parties on options for the future, and we will continue work on determining the best long-term sustainable future for the site.".