A MAJOR Asian steel company is keen to buy a large stake in Corus Teesside Cast Products (TCP) providing a spark of hope for 1,600 workers due to be laid off at the end of next month, The Northern Echo can reveal.

There have been several false dawns for Corus, but this time the company interested in the plant is a major player with impeccable credentials and is already a customer of TCP, buying steel from the plant following the withdrawal of an international consortium in May last year.

In addition, it has continually shown interest in striking a deal since the consortium, led by Italian firm Marcegaglia, pulled out half way through a ten-year agreement to buy nearly 80 per cent of TCP’s output.

It is understood the Asian company came close to a deal to buy a stake in the plant towards the end of last year, before negotiations foundered.

The Northern Echo can reveal that the company is at the centre of talks with a representative of Prime Minister Gordon Brown.

A source close to the negotiations said: “That is who the Government is chasing at the moment. They have sent someone and are trying to reignite this deal.

“The main thing is that they are still interested and were previously on the point of buying a share.”

Corus last night declined to comment, saying it did not talk about speculation.

The Asian company has helped to keep TCP going since the Marcegaglia consortium pulled out, by buying steel from the plant.

The greatest cause for optimism is the potential investor’s need for the type of steel slab produced at TCP.

Although the prospect of the company becoming involved will offer some hope to TCP’s workforce, sources said it was important to remain cautious about the chances of preventing the Redcar plant being mothballed by the end of next month with the loss of 1,600 jobs.

Despite the negotiations last year with the Asian company, which The Northern Echo is not naming so as not to jeopardise the dialogue, no deal was agreed.

It is understood the deal faltered over securing a potential third party for a smaller stake.

Last week, TCP managing director Jon Bolton told the North-East select committee that a company needed to take a part ownership in the factory, invest money in it and take the excess steel it produces.

Corus only needs 20 per cent of the three million tonnes of steel slab produced by TCP, so other investors would need to take the remaining 80 per cent.

It is understood the interested Asian company does not want to take all the remaining output.

However, the level of investment it is looking at would leave the plant only needing to find a third party investor to take on about a quarter of TCP’s output.

Reducing output at TCP is not an option, because once the blast furnace drops below a certain capacity it could be damaged.

A source said: “Corus can’t make it profitable on their own, but it could be profitable for both if the investor needs the steel that is produced.”

Two weeks ago, unions at the factory won a stay of execution until either the end of next month or until the raw materials at TCP run out, whichever of these come first, in the hope an investor could be found in time.

Last night, Geoff Waterfield, multi-union chairman at the plant, said: “As far as I am concerned, there is always hope and it won’t be for the lack of everybody making an effort.

“I think Teesside people have proven by working hard that there is hope.”