Are Tata Steel and the Queen about to become business partners?

Sajid Javid has indicated that the government is ready to part-nationalise Tata Steel’s UK business in order to save thousands of jobs.

The business secretary told the Commons that the government is looking at the possibility of “co-investing” on commercial terms with a buyer of Tata’s UK business.

The comments raise the prospect of the government taking an equity stake in the steel business, despite previously ruling out a nationalisation of the sites, which include the Port Talbot steelworks in Wales.

Javid said his comments showed the government “really will look at all options” and is a “demonstration of how far the government can go” to support the Port Talbot steelworks and the rest of the business. However he declined to clarify exactly what “co-investing” meant.

An emergency debate on the steel crisis will be held in the Commons on Tuesday. MPs will have up to three hours to discuss the crisis in further detail after shadow business secretary Angela Eagle secured an urgent slot in the chamber.

Javid made the comments as Tata pledged to court “many tens” of potential buyers and Greybull, an investment firm, agreed to buy the Indian company’s long products division for £1, saving more than 4,000 jobs and a steelworks in Scunthorpe.

More than 40,000 jobs are at risk after Tata announced last month that it will sell its UK business, which is losing at least £1m a day. The official sale process started on Monday, with Tata hiring KPMG as advisers and the government appointing EY.

The interested parties include Liberty House, run by metals tycoon Sanjeev Gupta; Greybull; German company ThyssenKrupp; and the management team at Tata Steel, who will welcome the government’s suggestion it could co-invest with a buyer as they will need substantial financial backing.

Koushik Chatterjee, group executive director of Tata Steel, said the company will run a “credible but expedited process” to find a buyer and declined to set a deadline.

He told a media briefing: “There has been a lot of people who have expressed interest, and we are aware of some of the interest that you refer to in the media. But today is a good time where our advisers will now start reaching out, and it is not a few people. I don’t want to give a number, but it is in tens, many tens actually.”

Chatterjee also said that Tata does not want to break up its UK business. “Our current proposition is to sell 100% of the equity ownership in Tata Steel UK,” he said. “When we approach the buyers we are approaching the buyers with this premise – that what is on offer is 100% equity of Tata Steel UK. If somebody comes back with a specific plant or a site or part of the business, that is our call at that point of time, depending on what the other interests are.”

He warned that the steel industry is facing “one of its worst existential crises in the last 50 years” but that a new buyer could reinvigorate the business. “A new investor who hasn’t suffered the legacy costs that we have suffered, for example impairments and so on, may have a fresh mind to put in capital and make the business more viable and sustainable,” he said.

Chatterjee declined to criticise the British government for its handling of the crisis and also played down concerns that the company’s pension liabilities of almost £15bn could scupper any deal.

“The trustees and investment committee run that pension scheme with a lot of prudence and in a conservative manner,” he said. “Therefore as of today the pension scheme is in a good position. So I think it is premature to talk about anything relating to that scheme at this point in time.”

The hopes of securing a rescue deal improved further after Javid’s suggestion that the government will go further than previously thought to protect Britain’s steel industry.

“I’ve been in contact with potential buyers making clear that the government stands ready to help. This includes looking at the possibility of co-investing with a buyer on commercial terms,” he said.

The Department for Business, Innovation and Skills declined to clarify whether Javid meant the business could be part-nationalised or whether co-investing includes offering a loan to a buyer. Javid said the government was not ruling anything out, but that his preferred option was the sale of Tata’s entire UK business to a private buyer.

One interested party could be Greybull, after its agreement to buy Tata’s long products business, which makes rails for train tracks and runs a major steelworks in Scunthorpe and has other sites in Teesside, Workington, York and northern France.

Marc Meyohas, partner at Greybull, said the “entire focus” of the organisation was completing the deal to buy the Scunthorpe site, which is subject to regulatory approval and securing a financing package worth £400m. However, he declined to rule out a bid for the rest of Tata Steel UK.

Meyohas said: “Once we cross that hurdle, shareholders of any business will be looking to grow and looking at opportunities.” He insisted that the long products business and the Scunthorpe site have an “exciting future” despite the pressure on the steel industry. The business will be renamed British Steel.

Meyohas said the “key ingredients” of the site were the world class workforce, loyal customers and its established footprint. “We all believe the future will do justice the heritage [of the brand],” he said. Greybull believes it can make the business profitable within a year and claimed it even recorded a profit in March by one measure.

The £400m funding package will be used to fund operations and modernise its sites. Half of the package will come from Greybull shareholders, with the other half from a consortium of banks and potentially the government.

“We know [the government] are keen to help and we will continue the discussions to make sure we get as much support as possible,” Meyohas added.

Greybull’s previous investments include rescuing Monarch, the low-cost airline, and backing a private equity takeover of Comet, the electricals retailer, which collapsed into administration just months later.

When asked why Greybull was the right owner of the business, Meyohas said: “We hope to be judged by our actions.”

Employees are being asked to accept a 3% pay cut and changes to their pension scheme but trade unions welcomed the deal. Martin Foster, Unite convenor at the Scunthorpe site, said: “This announcement is good news and brings us within touching distance of securing a future for steelmaking in Scunthorpe.”