Steel giant Tata has confirmed plans to sell its UK assets, threatening thousands of job cuts.
Unions reacted with shock and anger at the company's decision, taken at a board meeting in Mumbai.
Labour led calls for the Government to intervene to save the industry from total collapse.
In a statement issued in Mumbai, Tata said it noted with "deep concern" the deteriorating financial performance of its UK subsidiary in the last year.
"While the global steel demand, especially in developed markets like Europe has remained muted following the financial crisis of 2008, trading conditions in the UK and Europe have rapidly deteriorated more recently, due to structural factors including global oversupply of steel, significant increase in third country exports into Europe, high manufacturing costs, continued weakness in domestic market demand in steel and a volatile currency.
"These factors are likely to continue into the future and have significantly impacted the long term competitive position of the UK operations in spite of several initiatives undertaken by the management and the workers of the business in recent years."
Tata said it had suffered "asset impairment" of more than £2 billion in the last five years.
The board unanimously concluded that a plan aimed at saving plants including Port Talbot in South Wales was unaffordable, said Tata, adding it had been in "deep engagement" with the UK Government in recent months seeking its support to achieve the best possible outcome for the UK business.
"Following the strategic view taken by the Tata Steel Board regarding the UK business, it has advised the board of its European holding company ie Tata Steel Europe, to explore all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in parts."