The Secretary of State for Business, Kwasi Kwarteng, has said that the British Government is not willing to give financial support to Liberty Steel as the owners of the company have "opaque" finances.
Mr Kwarteng said that the GFG group which runs the Steel plants in South Yorkshire had a financial system that was "very unclear" and that the government didn't want taxpayers money to be subsidising operations across the world.
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.
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%.
Mr Kwarteng said that the Steel Council was looking at the issue "all the time".
He added that they were looking at pricing and energy costs for the industry and that they were trying to come up with solutions for the industry.
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."