Parliament is being recalled on Saturday to vote on emergency legislation that will bring British Steel under government control, No 10 has said.

The bill will give the prime minister the power to “direct steel companies in England”, which No 10 will use to stop Jingye, the Chinese owners of the Scunthorpe site, from closing it.

The government has been considering nationalising British Steel as the company has said it wants to shut the plant.

The GMB union said the move looked like “the first step in the process” of nationalisation, saying it was the only way to save the UK steel industry.

“The business secretary must be given huge praise for acting decisively to safeguard this vital industry and the thousands of jobs that rely on it,” the union said.

A senior government source said it would “not necessarily” lead to nationalisation. However, it remains a leading option as it is unclear how the company’s Chinese owners will respond to being directed by the UK government.

The move has been made after the failure to reach a deal to keep two blast furnaces operating at British Steel’s Scunthorpe plant, which is owned by the Chinese company Jingye.

A No 10 spokesperson said: “The prime minister has been clear, his government will always act in the national interest. All actions we take are in the name of British industry, British jobs and for British workers.

“Tomorrow parliament will be recalled to debate the Steel Industry (Special Measures) bill. The bill provides the government with the power to direct steel companies in England, which we will use to protect the Scunthorpe site. It enables the UK government to preserve capability and ensure public safety. It also ensures all options remain viable for the future of the plant and the livelihoods it supports.

“We have been negotiating with British Steel’s owners in good faith ever since coming to office. We have always been clear there is a bright future for steel in the UK. All options remain on the table.”

The Commons will sit at 11am, with MPs called back from Easter recess to discuss putting the assets under public control in order to preserve steelmaking in the UK. The government will aim to get emergency legislation through the Commons and Lords in one day of sitting.

Labour MPs have been told to tell their whips where they currently are and to make all efforts to return to Westminster to ensure the passage of the legislation.

In a statement from the House of Commons, a spokesperson said: “The speaker of the House of Commons has granted a request from the government to recall the House at 11am on 12 April for the house to take forward legislative proposals to ensure the continued operation of British Steel blast furnaces is safeguarded.”

The way in which the government could take control of British Steel is not yet known. This week government sources said nationalising British Steel was not easy, and would be a measure of last resort.

The last time parliament was recalled during recess was in 2021, when Afghanistan had to be evacuated during the Taliban takeover. It is also the first recall of parliament on a Saturday since 1982.

One MP said the move was “going down extremely badly” with colleagues who had been given no warning about the need to return to Westminster, when it had been known for weeks that British Steel was in trouble.

British Steel makes the vast majority of UK rail track and the government has been seeking a deal to keep the plant open.

The industry will be hit by a 25% tariff on steel exports to the US imposed by Donald Trump.

Talks had dragged on for three days after the government offered to buy raw materials to keep the plant running for the next few weeks while trying to find a longer-term solution.

Jonathan Reynolds, the business secretary, had played a leading role in the talks, along with Jingye’s chairman, Li Ganpo.

Reynolds had been due to update Keir Starmer about progress in talks on Friday, according to a Labour source.

Scunthorpe is the last remaining steelworks capable of making steel from iron ore and so is seen by some people as strategically important for the UK. However, Jingye last month said it planned to close the plant’s two blast furnaces, putting 2,700 jobs at risk. It has since refused to pay for new raw materials, with coal and iron ore deliveries to Immingham port not yet paid for.

The government had offered £500m in financial support to switch the blast furnaces for much cleaner electric arc furnaces, but Jingye had requested much more.

Talks this week are thought to have stalled when Jingye balked at conditions attached to the offer to pay for new raw materials. The delays in reaching an agreement had caused increasing alarm among workers, who feared at least one blast furnace might be forced to close as soon as next week, leading to inevitable job losses.