The government has offered to buy the coking coal that is essential to keep steel production going at British Steel in Scunthorpe, the BBC has been told.
British Steel has been warning for several days that the raw materials needed to keep its plant's two blast furnaces operational are running out.
Sources said the government was putting the offer in writing to British Steel's Chinese owner Jingye, which will decide on whether to accept it.
Separately government sources said the materials need to be paid for within the next two days or production will cease at the British Steel plant within weeks and cannot be restarted. The Department of Business and Trade did not comment.
Jingye has said the furnaces are "no longer financially sustainable".
Talks are set to resume between British Steel bosses and government officials on Thursday, with unions saying the situation is on a "cliff-edge".
The government has not ruled out nationalising British Steel, which employs 2,700 people, saying all options remain on the table.
Coking coal, which has to be imported, can take 45 days to arrive once it's been ordered. The plant also needs iron ore but that tends to arrive more quickly than coal.
The government offer to purchase the raw materials is a way for it to buy time while negotiations over the future of the plant continue.
Business Secretary Jonathan Reynolds met with the CEOs of Jingye and British Steel on Wednesday.
In a joint statement, they said ''Both sides welcomed continued cooperation in talks to find a way forward. The UK government thanked Jingye for their respect for the workforce during this process, and work continues at pace to find a resolution."
Ministers are thought to prefer a commercial solution to secure the long-term future of the plant.
But due to the urgent need to acquire new raw materials, talks about the longer-term future of steelmaking in Scunthorpe are now largely on hold.
The immediate issue is who will pay for shipments of iron pellets and coke.
One option being discussed is whether the government can directly buy the materials using taxpayers' money.
It is understood that the easiest legal avenue would be to come to a deal with Jingye, whereby they agree to carry on running the plant, as long as the government pays for the raw materials.
