The Dutch and British arms of Tata Steel may be on the verge of breaking apart, 20 years after Hoogovens and British Steel merged to form Corus, a source has told the Volkskrant.

Given that just the British arm of the company has applied for state support equivalent to €565m, a break up would appear to be inevitable to make sure British taxpayers’ money does not end up in the Netherlands, the paper said.

One source told the paper that a ‘independent future’ for the two units and the bankruptcy of the British arm’ is being discussed with the management and non-executive boards.

This ‘would be the result of Brexit, the decision by the Indian parent company not to help the European parts any more, and the coronacrisis, which means the British arm will go bust without state support,’ Utrecht University professor Hans Schenk told the paper. Schenk is a former advisor to the Tata Steel works council.

Tata Steel is considered an essential industry in the Netherlands and is outperforming the British arm, even though turnover has dropped 20% because of problems facing the car industry, the Volkskrant said.

Frits van Wieringen, chairman of the central works council, said the Dutch arm of the company is well placed to get through the coronavirus crisis in a reasonable way.

In April Tata Steel said it was delaying a planned reorganisation of its European arm until July at least, because of the coronavirus crisis. The company had wanted to cut 3,000 jobs and slash costs in an effort to restore profitability. Almost 1,000 of the 11,000 jobs in IJmuiden would have been scrapped.