Tata Steel chiefs are holding talks with union bosses to break the deadlock over a £15bn pension scheme, in order to rescue its Port Talbot, south Wales site, the Sunday Times has reported.

In a bid to save Port Talbot, Tata is understood to be embarking on two days of pension talks to secure a merger deal of its European operations with German rival Thyssen Krupp. The Welsh site, which is Britain’s biggest steelworks, is expected to be included in the deal.

It has been confirmed that the talks are the latest in a series of debates over Tata’s pension scheme.

A source close to the situation noted that Tata and Thyssen Krupp could settle the deal within weeks, regardless of whether the pension issue has been resolved. However, the partnership would be liable for resolving the pensions problem.

It is understood that Tata and Thyssen Krupp are unwilling to burden their new venture with the pensions of 130,000 retired and working members in the British Steel Pension Scheme.

Tata Steel told the Sunday Times that it “continues to responsibly develop options to identify the best prospects for the future sustainability of our UK operations and the best outcome for members of the British Steel Pension Scheme”.

If Port Talbot is to be rescued, Tata Steel has confirmed that it will keep it open for a set number of years.

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