The future of 5,000 British Steel workers remains uncertain as its owners continue to lobby for government backing.
The UK's second-biggest steel maker had been trying to secure £75m in financial support to help it to address "Brexit-related issues".
If the firm does not get the money it would put 5,000 jobs at risk and endanger 20,000 in the supply chain.
Labour has urged the government to nationalise British Steel.
"The collapse of British Steel would have a devastating impact on thousands of jobs in Scunthorpe, and could have major knock-on effects on wider supply chains," said Jeremy Corbyn.
The government said it would leave "no stone unturned" in its support for the steel industry.
British Steel's main plant is at Scunthorpe, but it also has a site in Teesside.
Costs of a collapse
According to think-tank IPPR, allowing British Steel to collapse would lead to £2.8bn in lost wages over a 10-year period and cost the government £1.1bnn in lost revenue and extra benefit payments.
Such a decision would also reduce household spending by £1.2bn, which would have an impact on the economy.
IPPR's chief economist Carys Roberts said: "Our steel sector is important not just for the jobs of workers in the plants, but also for jobs in the local economy around the plants - as well as the success of exporting industries which rely on those inputs.
"We need a UK-wide industrial strategy that supports strong supply chains, including the foundation industries such as steelmaking that manufacture core materials for use in other industries."
Last Thursday, British Steel said it had the backing of shareholders and lenders and that operations were continuing as usual while it sought a "permanent solution" from the government to its financial troubles.
It is understood that along with administration, nationalisation or a management buyout are being discussed as fall-back options for the company.
British Steel's troubles have been linked to a slump in orders from European customers due to uncertainty over the Brexit process.
The firm has also been struggling with the weakness of the pound since the EU referendum in June 2016 and the escalating trade US-China trade war.
One of its biggest customers is Network Rail, 95% of whose rails are supplied by British Steel's Scunthorpe plant.