Tata Steel is preparing to commit to its UK steel operations, including the vast Port Talbot works, for at least the next 10 years, in a move which would secure the future of more than 11,000 steel workers and deliver a major boost to the government.
Lord Kumar Bhattacharyya, one of the group's closest advisers, said Tata is preparing ''major announcements about growth in Tata Steel'', and is ''resolving'' the problems facing the business. He also said the company is halting the sale of its speciality steels arm, which is part of Tata Steel UK and employs about 2,000 people in northern England.
Bhattacharyya is close to Ratan Tata, the chairman of Tata Group, and advised him on the purchase of Corus, which was previously British Steel, and Jaguar Land Rover almost a decade ago. He is the founder and chairman of Warwick Manufacturing Group, a research partnership between the University of Warwick and leading manufacturers. He is also a member of the panel that will choose Tata's successor as group chairman.
The future of Tata Steel UK and its 11,000 workers has been in doubt since the Indian company announced a review of the business in March, amid mounting losses and heavy debts.
The entire UK business was initially put up for sale before Tata Steel pulled out of talks to focus on a merger of its European operations, including the UK business, with the German group ThyssenKrupp.
Talks with ThyssenKrupp have been continuing, but according to The Guardian, Tata sources say the company is now willing to commit to its UK sites whether this deal goes ahead or not.
Bhattacharyya was talking at a meeting of political and automotive leaders from the Midlands on Thursday evening, which included Greg Clark, the business, energy and industrial strategy secretary.
The government has been fiercely criticised for not doing enough to help the steel industry, which has struggled due to mounting energy costs and China dumping cheap steel in Europe, which has driven down prices.
The Labour peer said, ''Of course we went through some problems as you have read in the press in the last few months but we are now resolving it and we are working with everybody, with the workers, local authorities and government, in order to make sure that Tata produces steel here for the next 10 years at least. We will do that.''
Bhattacharyya claimed Britain ''has got a lot of skill in steel'', adding, ''We have been going through some problems of course, temporary problems, but nevertheless I think we are on the verge of solving it. We will work with Jaguar Land Rover to introduce thin steels for the new generation of cars.''
The future of Tata Steel UK's pension scheme, the British Steel pension scheme, has been a major obstacle to the future of the business. It has liabilities of more than £15 billion and 130,000 members, making it one of the biggest retirement schemes in the country.
The company has been in talks with the government about spinning the pension scheme off into a new vehicle disconnected from Tata Steel, which could prove hugely controversial if it is finalised.