Unions today backed a Chinese deal to buy British Steel, with a sale now “firmly in sight”.

Unite, the GMB and Community threw their weight behind Jingye’s planned purchase of the Scunthorpe site, which was plunged into receivership last year.

The Far East firm plans to pump in £1.2billion but could also axe 500 jobs - though unions stressed “significant numbers have recently left the business”, meaning any new redundancies are likely to be minimised.

The unions said in a statement: “Over the past 10 days there have been detailed discussions and a lot of back and forth between the unions and Jingye but we have reached a point where there is an outcome regarding employee pay, terms and conditions.

The steelworks has been in receivership since May

“These discussions have been extremely challenging but with British Steel in liquidation it is clear that if the business is to survive change is required.”

They added: “The sale to Jingye is now firmly in sight and we would encourage all stakeholders in the business to focus on reaching a positive conclusion.”

Some 4,000 people work at the Scunthorpe plant, with another 21,000 people employed in the supply chain.

Staff have been waiting anxiously for a deal to save the site, which was placed in receivership in May and is reportedly losing £1million a day.

British Steel’s future was thrown into jeopardy when its investment fund owners Greybull Capital decided to pull out.

A worker at the British Steel plant in Scunthorpe

It had bought the firm for a token pound in 2016 and revived the famous name.

The company produces around 2.5 million tonnes of steel a year for the construction and rail industries.

However, Greybull repeatedly demanded Government bailouts - and was handed a £120million loan last April to pay an EU emissions bill.

Weeks later, its pleas for a £30million loan to rescue the company were rebuffed - forcing the dive into liquidation.

Unions said it had been “made clear that there will not be another sales process for the whole business if the Jingye deal does not complete”.

If it did not go through, “British Steel would be broken up and sold in parts”, they warned.

The £1.2billion investment “would transform the business and secure the future of British Steel”, they added.

Community operations director Alasdair McDiarmid said: “Faced with challenging circumstances we believe that the dialogue between Jingye and the unions has produced a better deal for employees than what was otherwise on the table.

“We look forward to working with everyone to securing the future of British Steel under Jingye’s ownership.”

GMB national officer Ross Murdoch said: “In endorsing this package in principle, the trade unions believe they have struck the right balance between delivering cost savings and maintaining jobs with decent terms and conditions to drive the new business forward.

Daily Mirror Save Our Steel Campaign
The Mirror has been campaigning to Save Our Steel since 2015
Shadow Steel Minister Gill Furniss

“It also includes a positive and innovative business plan for the future, which hopefully will secure employment for many years going forward.”

Shadow Steel Minister Gill Furniss said: “Workers and their families will be relieved that long-term investment is being promised to secure the future of Steel manufacturing at Scunthorpe and on Teesside.

“However, the threat of losing up to 500 jobs is clearly concerning and I urge the Government to work closely with both Jingye and the unions to reduce job losses and help those likely to be affected”.

The Mirror has been campaigning to Save Our Steel since 2015 when the industry was hammered by thousands of job losses and plant closures.