A deal over pay and conditions has been struck between British Steel workers and the Chinese industrial firm which wants to buy the business out of administration, unions have confirmed.

But workers' representatives said they expect to see up to 500 job lossesfollowing 10 days of "extremely challenging" negotiations with Jingyemanagement to discuss their business plan and in particular their proposalsrelating to employment.

Jingye is looking to buy the business from Government liquidators, afterministers promised to fund the company following its collapse last year. It isthought to be losing up to £1 million a day.

As British Steel is in liquidation, any new owner could just offer new contracts with statutory minimum terms and conditions. There is no legal obligation to do more, nor to consult on any changes.

The National Trade Union Steel Co-ordinating Committee

Senior union representatives endorsed the deal on Thursday in principle, with full details being drawn up.

But disappointment remained over the potential job losses, with unions arguing that the positions are necessary at the plant.

As was widely expected, Jingye also intend to reduce overall headcount. This could be by up to 500 jobs, though significant numbers have recently left the business, and will be subject to ongoing detailed discussion at departmental level.

The Steel Committee
British Steel Scunthorpe Credit: Press Association

Bosses from the Chinese firm remain positive over the future of British Steel.

We believe that this agreement lays the groundwork to provide well-paid, skilled jobs at British Steel for many years to come. It will pave the way for significant investment in the company that will transform the business and allow it to succeed."

Jingye chief executive Li Huiming