Several funds that specialise in trying to rescue troubled companies are battling it out to buy Tata's long products arm, which is at the heart of its Scunthorpe steel works in Lincolnshire.

Leading the pack are two of Britain's biggest turnaround investors: financiers Greybull and Endless and a third bid has come from a mystery American private-equity house.

The business, which will have around 5,000 staff after the redundancies, produces parts that are used in construction and heavy industry.

It is estimated that hundreds of millions of pounds will be needed to revive the business. A further 720 jobs are set to go at Tata's bar business around Rotherham.

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