The UK’s Business Secretary has been urged to step in and protect jobs at a Scottish steel mill amid concerns for the plant’s future.

Scottish Liberal Democrat economy spokesman Willie Rennie has written to Business and Trade Secretary Jonathan Reynolds to warn that the Dalzell steel mill, in Motherwell, North Lanarkshire, was “teetering on the edge” of closure.

It comes after Liberty Steel, which owns the steelworks, had suspended orders from the Dalzell mill last month.

In a letter to Mr Reynolds, the Liberal Democrat MSP said he had warned of issues with the plant for years but accused the Scottish Government of “ignoring” concerns.

Scottish ministers obtained the steel mill from Tata Steel for £1 in 2016 in a “back-to-back” sale, before immediately transferring it to Liberty Steel.

However, after the collapse of Liberty Steel’s Greensill lenders in 2021, and the launch that year of an alleged fraud investigation into the Gupta Family Group (GFG), which owns the firm, the steel mill has faced growing pressure over its future.

There are also concerns ministers may be liable for the clean-up costs if Liberty Steel does go bust.

Mr Reynolds has been urged to “step in before it is too late”, with Mr Rennie stating: “I have been warning about Liberty Steel for years but the Scottish Government have ignored those warnings. That is despite their role in the sale of the plant to Liberty Steel.”

The company also failed to pay back a £7 million government loan from 2016, it is understood.

He added: “I believe it is time for the UK Government to step in before it is too late. The Scottish Government is only concerned about protecting its own reputation, having brokered the controversial deal.

“I am requesting that you make contact to get to the bottom of the situation so that there can be an honest discussion about how to secure its future and the future of its workers.”

A Scottish Government spokesperson said: “The Scottish Government acted quickly in 2016 to support a transaction involving Tata Steel and Liberty House to sustain 133 jobs at the site, where production continues.

“The Scottish Government maintains regular engagement with Liberty Steel.”

A spokesperson from the UK Department for Business and Trade said: “We’re working in partnership with trade unions and business to rebuild our steel sector in a way that’s both right for the workforce and delivers economic growth.

“We recognise the need to support the future of steelmaking in the UK, which is why we’ve committed to £2.5 billion of investment to rebuild the UK steel industry.

“We see a bright future for steel in the UK.”