The Government is poised to funnel nearly a third of a billion pounds towards British Steel to save the struggling metal maker from collapse, according to reports.

Sky News said that Chancellor Jeremy Hunt is prepared to hand the company £300 million in instalments over the next few years if it meets certain conditions.

The investment could help protect jobs at the company, which employs about 4,000 people directly.

It could also save the Government an even bigger bill should British Steel collapse, the broadcaster said.

British Steel could not be reached for comment. The Treasury referred queries to the Department for Business, Energy and Industrial Strategy, which did not provide a response.

Sky said that the funding will be linked directly to attempts to get British Steel to decarbonise, by helping it to replace the company’s blast furnaces in Scunthorpe, Lincolnshire, with electric alternatives.

These so-called electric arc furnaces are better for the environment as they can run on renewable power. They are best used on recycled steel.

The Government is set to tell British Steel about the potential deal in the coming days.

There will be strings attached, such as protecting jobs, and a promise from China’s Jingye Group, which owns British Steel, to invest at least £1 billion in the company by the start of next decade.

Once a giant of UK manufacturing, British Steel has fallen on hard times in recent years.

Just three years ago the company was bought out of insolvency by Jingye, becoming its third owner in four years.

But the Chinese owner has recently said it will need taxpayer funding to keep the doors open.