There was a sombre mood hanging over Scunthorpe as workers and residents came to terms with the news that British Steel, the town’s biggest employer, had gone into liquidation.

Workers have been told not to speak to the press but one lorry driver said: “I’ve worked here all my life. It doesn’t matter how old you are or if you’re nearing retirement, you still don’t want to be out of work. It’s a waiting game and we can’t plan for either way at the moment.”

It’s not just the 5,000 people employed by British Steel who are worried about the future, though. It’s predicted the factory’s closure could affect 20,000 jobs in the local area and supply chain.

John Fleming owns AAA Taxis in Scunthorpe and is concerned about what the closure could mean for his business: “The impact on us could mean we have a loss of jobs. We get company reps coming into the railway station to be taken to British Steel, and a number of employees want to go out at night and they use taxis. We’re just as anxious as the people in there.

“It affects everybody. This town is desolate, and what is it going to be like if they take the steelworks out? It will be a barren land.”

Like many high streets around the UK, Scunthorpe’s is struggling, with boarded up shops and To Let signs littered among the shops and cafes.

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Hull Chamber of Commerce think the plant’s closure would be a disaster for these local companies and they want the government to introduce a Steel Task Force to save the plant. Spokesman David Hooper said: “I can’t emphasise how big a deal this is, it would be an absolute disaster [if it closes]. When it was bought by Greybull and rebooted, they brought the British Steel name back and everybody was so proud and upbeat about it, so it’s really sad.

“Most of the industries and businesses around there evolved with the steelworks, and other businesses will be affected because the people who work there won’t have any money to spend. It’s pretty dire for the region.”

Their view is that the plant is too big to be allowed to fail and, with steelworks bigger than the town itself, the consequences of its closure would be huge.

One company in the vast network of businesses surrounding the plant is Apollo Recruitment who supply a number of staff to the factory. A company director said: “It would have a big knock-on effect for everybody, not only Apollo but all the contractors, workforce and other businesses. It would be detrimental to the area for definite.”

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Meanwhile, Josh Raspin, a sales rep at BAPP, which supplies nuts and bolts and health and safety equipment to contractors in the British Steel supply chain, said people in Scunthorpe were reeling.

“We are shocked more than anything,” he said. “A fair few of our customers locally buy stock from us when they go in to do work at British Steel. We won’t know until it settles down how it will affect us. Right now, we are still really busy.”

Workers at the plant have been briefed by management that they’re safe for now while they seek a buyer under the government’s official receiver and EY, who have taken over running of the company.

As a result, some workers said they were remaining positive about the future and were optimistic a buyer will be found.

The Scunthorpe steelworks were built in the mid-19th century, going through nationalisation in the 60s and privatisation in the 80s, and passing through a number of hands since.

Rob Waltham, Conservative leader of North Lincolnshire council, said: “Scunthorpe has had a long history with steel. I remember my father being made redundant in the 70s, so this isn’t new for us. We’re resilient in Scunthorpe, we’re used to having difficult times.”