The British government will comply with European Union's state aid regulations in its efforts to help find a buyer for Tata Steel's UK assets, business secretary Sajid Javid said on Sunday.
However, he asserted that any deal on the revival of Tata's steel business in the UK would not be a bailout or nationalisation.
"It's not a bailout; it's not a nationalisation. Working within that framework we can see success at the end of the road," he said.
Tata Steel last month announced plans to sell its entire steelmaking operations in Britain, raising the prospect of the nation's steel industry dying suddenly, rendering at least 10,000 jobless.
Javid said it is this that has prompted the government to offer financial support for the company in securing a buyer. The UK government last week offered a support package to take up to 25-per cent stake in the bought out entity.
A 25-per cent equity stake in Tata Steel's operations on the country could cost the British government hundreds of millions of pounds.
In an interview with the Sunday Times, he said any deal would be structured to avoid running foul of EU rules on state aid.
"It will all be compatible with state aid... government can provide financing as long as it's on commercial terms," he said. "I don't envisage having to apply for any exemption or approval from state aid. Whatever we've got in mind is compliant."
Javid also denied that the government's willingness to help the sale had been influenced by the impending referendum on Britain's membership of the European Union.
Javid, a former banker and one of the government's strongest free-market advocates, said any support package would be a commercial decision.