Demand currently at two-thirds of 2007 level

Tata Steel is cutting up to 1,500 jobs after it said demand for structural steel in the UK is only two-thirds of the 2007 level and is not expected to recover within the next five years.

Up to 1,500 jobs could go at its Scunthorpe and Teesside plants.

In a statement, the group said its “restructure” was also partly prompted by uncertainty over UK carbon cost rises.

Karl-Ulrich Köhler, Tata Steel Europe chief executive, said: “The continuing weakness in market conditions is one of the main reasons we are setting out on this difficult course of action; another is the regulatory outlook”.

In March the government announced a carbon floor price of £16/t from 2013, which Köhler branded a “potentially severe blow” to the sustainability of UK steelmaking.