Network Rail is ready to bid for a chunk of embattled British Steel as time runs out for offers to buy the business, which collapsed into insolvency last month.

State-owned Network Rail is understood to have prepared a bid for Scunthorpe-based British Steel’s rail service centre business, responsible for the welding, finishing and storing of rails for the UK’s train network. Network Rail owns and operates Britain’s railway infrastructure, including 20,000 miles of track, and is a major customer of British Steel, buying 100,000 tonnes of rails from it a year.

However, such a deal could raise eyebrows. Network Rail is controlled by the Government and the bid could be seen as an attempt to nationalise part of British Steel via the backdoor.

The approach is just one of about 10 bids likely to be submitted to the Official Receiver, which took control of British Steel last month. The business was placed in compulsory liquidation after owner Greybull failed to secure a £30m state bailout, throwing the jobs of its almost 5,000 staff and a further 20,000 roles in the supply chain into jeopardy.