STEELMAKER Corus last night denied reports that a buyer for its Teesside business could be set to pull out, putting 2,000 jobs at risk.

In January, Corus agreed to sell a majority stake in its plant at Redcar, Teesside, to a consortium led by Marcegaglia for 480 million dollars (£328m) but the Italian firm is now going cold on the deal, the Financial Times said.

The chairman, Stena Marcegaglia, is said to have decided the deal no longer made sense amid gloomy prospects for the global steel industry with an estimated 15 per cent fall in world output this year.

Mr Marcegaglia believes it would be better to pay a penalty fee to break the sale agreement than go ahead when the steel industry is set to be burdened with overcapacity for years to come, the newspaper reports.

The sale plans were announced by Corus three months ago alongside plans to cut 3,500 jobs from its worldwide workforce, including 2,500 in the UK.

Anglo-Dutch firm Corus, which has been owned by Indian conglomerate Tata since 2007, announced a series of cost-cutting measures including the mothballing of a mill in South Wales and restructuring several parts of its business.

Corus said then that the sale of Teesside Cast Products would ''significantly improve'' the long-term prospects of the business.

TCP, which has been run as a separate business since a restructuring by Corus in 2005, makes technically sophisticated steel in the shape of slabs.

Steel made in Teesside can be seen in structures worldwide, from Canary Wharf in London to the Sydney Harbour Bridge in Australia.

Corus and Marcegaglia were both unavailable for comment. The Community union, which represents the majority of the steelworkers on the site, declined to comment.