More steel jobs are set to be axed, plunging the industry into further crisis.
Caparo is understood to be set to go into administration, with the loss of around 1,800 jobs.
The cuts would hit several parts of the UK, including the West Midlands.
The firm, which is owned by Labour peer Lord Paul, produces a number of steel products.
The news comes ahead of an expected announcement on Tuesday by Tata, confirming 1,200 job losses at steel plants in Scunthorpe and Scotland.