Workington's TSP Engineering has a bright future, a county business leader said, despite the collapse of its parent company, British Steel.

British Steel, owned by Greybull Capital, went into compulsory liquidation on Wednesday, but it appears TSP Engineering is not as affected as first thought.

Nobody from the specialist manufacturer, , a wholly-owned subsidiary of British Steel, based at Derwent Howe, was available for comment, but Rob Johnston, chairman of Cumbria Chamber of Commerce, said: “TSP is a profitable business with a healthy order book including significant contracts with the nuclear industry.

“Although owned by British Steel, it is a separate company with its own funds and isn’t in liquidation. We’ve spoken to TSP and it’s very much business as usual.

"The official receiver is looking to sell British Steel as an entity but, if that fails, is likely to dispose of TSP Engineering separately to help pay the parent company’s debts.

“We don’t think there will be a shortage of potential buyers for what is a very successful business.

“TSP has a bright future. Indeed, there are opportunities to grow the business."

TSP Engineering employs around 220 people.

Businesses with an interest in seeing it survive include West Cumbria Mining, which plans to extract coking coal for the steel industry from a new mine at Whitehaven.

Mr Johnston added: “British Steel was set to buy around five per cent of the output from the proposed Woodhouse Colliery.

“The demise of British Steel would-be a setback for West Cumbria Mining but doesn’t undermine the viability of the project. Most of the coking coal is destined for export markets.”

Greybull Capital had been seeking financial support from the Government, saying it faced a number of Brexit-related issues but talks failed.

But Business Secretary Greg Clark said: “The Government has worked tirelessly with British Steel, its owner and lenders to explore all potential options to secure a solution.

“I have been advised that it would be unlawful to provide a guarantee or loan on the terms of any proposals that the company or any other party has made.”

TSP Engineering was owned by Tata Steel, but was part of the group of businesses sold to Greybull Capital in 2016, under the British Steel Ltd banner.

TSP is one of the largest engineering facilities in the UK, comprising 19,200sq m of workshop capacity, five metre deep pits and a lifting capacity of 130 tonnes.

It provides a range of engineering services including project management, design, manufacture and testing facilities for the nuclear, defence, oil and gas, steelmaking and construction and industrial sectors.

In February, it was the only Cumbrian firm included in The Manufacturer Opus, which showcases the UK’s premier manufacturers, alongside big names like Siemens, McLaren Automotive and Leyland.

Unions have urged the Government to bring British Steel into public ownership until a buyer can be found.

The Financial Times reported that Mr Clark said potential buyers had already made contact and possible bidders included Chinese steel group Hesteel and UK-based private equity fund Endless. Liberty House, led by Sanjeev Gupta, is also monitoring the situation.