The Government has reportedly rejected an appeal by Liberty Steel for £170 million in financial support.
Liberty Steel employs nearly 2,000 workers at sites in Rotherham, Stocksbridge and Scunthorpe. It has 5,000 workers across its 12 UK sites.
Concerns over the future of the company were raised after financial backer, Greensill Capital, went bust.
Penistone and Stocksbridge MP Miriam Cates has today written to the Business Secretary, Kwasi Kwarteng asking if the government will give more assurances to the workers at Liberty Steel.
The company told the Government last week that support was needed to pay operating expenses and deal with recent losses.
In the UK speciality steel business, weakness in the aerospace market has cut demand for some products by 60%.
A Government spokesman said: "The Government is closely monitoring developments around Liberty Steel and continues to engage closely with the company, the broader UK steel industry and trade unions.
"The Government has supported the steel sector extensively, including providing over £500 million in recent years to help with the costs of energy.
"Our unprecedented package of Covid support is still available to the sector to protect jobs and ensure that producers have the right support during this challenging time."
It is understood that ministers have concerns about the structure of the company and whether any bailout would have remained in the UK.
A spokesman for Liberty's GFG Alliance said: "While Greensill's difficulties have created a challenging situation, we have adequate funding for our current needs.
"Discussions to secure alternative long-term funding continue to make good progress and while this takes place we have asked all of our businesses to manage cash carefully.
Shadow business secretary and Doncaster North MP Ed Miliband said: "The Government must have a Plan B for Liberty Steel to protect thousands of jobs and our steelmaking capacity, which is vital for our communities and our national security.
"All options should be on the table, including public ownership."