Last year, Tata Steel said it was replacing traditional blast furnaces with an electric arc furnace at its biggest UK site in Port Talbot, Wales.

Traditional steelmaking ceased in September, with thousands of workers losing their jobs.

British Steel also announced it would close blast furnaces in Scunthorpe in 2023, and unveiled plans to roll out a less polluting electric arc furnace.

The plans, which are greener but require fewer workers to keep them going, raised fears over potentially thousands of job losses.

The Labour-led government has vowed to spend £2.5bn “to rebuild the steel industry”.

The money would sit alongside a separate £500m package for Tata Steel to part-fund the new steel production at Port Talbot.

The Steel Council, co-chaired by the chairman of Teesside-based Materials Processing Institute, is set to work towards the launch of the government’s steel strategy in spring.

This strategy is expected to set out how steel capacity can be increased in the UK and how investment decisions can meet demand and boost economic growth.

The council will also discuss how to allocate the up to £2.5bn of funding.