Sajid Javid has drawn up secret plans to sack up to 40 per cent of his department's staff despite being locked in a battle to save British steel from extinction, documents leaked to The Telegraph have revealed.

Detailed proposals from the management consultancy McKinsey suggest firing more than 4,000 civil servants over the next four years to save money.

The cuts are a major escalation to those outlined by George Osborne in last year's spending review which demanded a 17 per cent decrease in spending by 2020.

The revelation that Mr Javid, the Business Secretary, is considering such deep cuts while facing accusations the department is failing to cope with the steel crisis will likely cause embarrassment.