It's the same old British story Click here to read why Corus is in such a mess

The steelmaker, which was created through the merger of British Steel and the Dutch firm Hoogovens in 1999, has said it needs to stem heavy losses. On the London stock market, Corus shares lost more than 60% of their value on the news.

In a statement, Corus said it planned "significant further capacity reductions and concentration of operations onto fewer sites".

This could mean the closure of one of Corus' three main UK plants, at Redcar on Teesside, Scunthorpe, in North Lincolnshire, or Port Talbot, in South Wales, the BBC has been told.

'Suicidal'

The company has promised to start consultation with unions on job losses in the next week.

But it is unwilling to say which plants will be axed until it has completed an internal review.

Corus, which employs 26,000 people in the UK, said it expected to report a 2002 operating loss of �393m.

Shares in the troubled steel giant closed down 64.29% on the news, at 5 pence. Less than nine months ago the share had traded at just a touch under 90p.

Mike Leahy, general secretary of the Iron and Steel Trades' Confederation, said any further cuts in UK steel capacity would be "suicidal".

He said industrial action would be "almost inevitable" if Corus went ahead with the closure plans without consultation.

"We could disrupt production in the UK quite easily," Mr Leahy told BBC Radio 4's Today programme.

In 2001, Corus cut 3,000 steel jobs in Wales, closing its Ebbw Vale, Bryngwyn and making major cutbacks at Shotton and Llanwern.

The company has struggled to remain competitive in a depressed global steel market.

Aluminium row

A bitter internal row has also blown up over the 750 million euro (�518m) sale of an aluminium plant.

Corus' supervisory board decided to reject the sale of the unit - which was to be bought by France's Pechiney - following crisis talks on Monday night.

The move was branded "irresponsible and unreasonable" by the UK management.

The UK arm was relying on the cash to pay down its �1bn debt mountain and cover the cost of restructuring.

But the Dutch board is worried about selling off its profitable assets to prop-up the loss-making British operation.

Without the sale, the UK management may have to sell off some of its non-core assets, according to a source close to the company.

In a statement, Corus said it would appeal against the supervisory board's decision in the Amsterdam Court of Appeal, raising the unusual prospect of a court battle over an internal company row.

The case could be heard as early as next week.

Minister in the dark

Meanwhile, it has emerged that Trade and Industry Secretary Patricia Hewitt was caught out by the Corus announcement.

Speaking to the all-party Parliamentary Steel Group on Monday night, Mrs Hewitt boasted that the productivity of British steel workers was now better than those of Germany or France.

"I know there have been some very painful job losses but I am hugely impressed with the work (steel union) ISTC and the company have been doing," Mrs Hewitt said.

Challenged about possible job losses she insisted: "I don't believe that is where we are going."

"The most important thing we can do is to support all the efforts they (Corus) are making and ensure that they can get through their financial difficulties.