THE Prime Minster says the Government will do everything possible to help staff threatened with redundancy at the Sheerness steel mill which is owned by ASW.

Tony Blair made the comment during Prime Minster's Question Time at the House of Commons after Derek Wyatt, Sittingbourne and Sheppey MP, raised the subject of ASW going into receivership.

Mr Wyatt told the Premier that the announcement had had a "devastating impact" on his community. He said: "Presdent Bush's steel tariff proposals may have been the last straw for UK banks in respect of our overdraft facility for ASW.

"Does the Prime Minster think that the World Trade Organisation has the systems in place to react more speedily within days, rather than months, on this issue?"

Mr Blair replied: "First of all let me first express my sympathy to my Hon. Friend's constituents. We have made clear our reasons for disagreeing with the decision made by the United States and I hope that the WTO rules against it.

"I understand my Hon. Friend's desire to speed up the process; that can be considered in the context of the negotiations that will continue later this year.

"However, even in the light of the exclusions for some of our companies, the decision is regrettable. I do not believe it is the interests of people here or of the US steel industry." Mr Blair stressed: "We shall do everything possible to help those employed by the company."

Mr Wyatt is due to meet with Sheerness workers tomorrow (Friday) afternoon. ASW announced it was going into receivership yesterday morning. The move came due to a £65 million debt brought about by trading difficulties over the last six months.

The company tried to persuade its banks, Lloyds TSB and National Westminster, to extend its overdraft facility to allow them to operate while an investor was sought but the banks told the company they would not support them beyond Friday, July 5.

Derek Wyatt, along with politicians from South Wales and Central Government, tried to save the company when they organised a meeting at the Department of Trade and Industry in London on Monday. Discussions continued until late on Tuesday night but when no conclusion was made ASW, which employs 1,250 people in Sheerness and Cardiff, 300 of whom work at the Sheppey plant, were forced to make the announcement.

Richard Hill and Roger Oldfield, partners of KPMG Corporate Recovery, have been appointed as joint administrator receivers.

Although the earlier acquisition of Co-Steel Sheerness had improved ASW's trading performance three factors led to the company's decline. They were the decline in the world steel market in the second half of 2001; the imposition of trade sanctions by the US government; the import of low priced East European reinforcing steel and a sharp rise in ferrous scrap.