UP to 25,000 people could lose their jobs following the insolvency of British Steel yesterday, with the blame being laid fair and square on Brexit and the Tory Government.

The collapse came after the company sought a £30 million loan from the Government which turned down the loan request saying it was illegal.

The immediate winding up order was made yesterday by a High Court judge following an urgent application by British Steel. Justice Snowden said the firm had cited “the uncertainties resulting from Brexit” as one of the reasons for its difficulties.

Prime Minister Theresa May told the Commons: “We can only act within the law and it is clear that it would be unlawful to provide a guarantee or loan on the terms requested by the company.”

Now British Steel will continue to trade while the Government’s Official Receiver searches for a buyer to rescue its three major plants, including the giant steelworks at Scunthorpe. Wages have been paid and the Official Receiver will keep on all staff and try to sell the business as a going concern.

There are huge doubts, however, over the 5000 jobs at British Steel’s works, plus 20,000 others in the firm’s supply chain or in businesses dependent on income from the company and its employees.

As the communities around the steelworks at Scunthorpe in North Lincolnshire and Skinningrove and Lackenby in Redcar and Cleveland learned of the approaching devastation to their way of life, it should not have been a day for political point-scoring but that became inevitable when owners Greybull Capital blamed “insurmountable” Brexit-related problems for British Steel’s collapse.

The company’s chief executive Gerald Reichmann – in post for just six weeks – wrote to staff to blame weak market demand, high raw material prices, the weakness of sterling and uncertainty over the outcome of Brexit discussions.

Both North Lincolnshire and Redcar and Cleveland voted by two-thirds to a third to Leave the EU in the 2016 referendum, reassured by at least one prominent Leave campaigner, Nigel Farage, that the firm could only survive outside the EU.

Even before the insolvency was approved in court, Farage was blaming the EU for its emissions “tax” scheme, but an old tweet came back to haunt the Brexit Party leader.

In an April 2016 tweet, the Brexit Party leader wrote: “If we vote to Remain on June 23rd it is the end of the steel industry in this country. Simple as that. We must Leave EU.”

Now just one major blast furnace capable of making large quantities of steel remains in the UK – the Tata works at Port Talbot in Wales.

The knock-on effects could be devastating for companies like Network Rail which gets more than 90% of its steel rails from the Scunthorpe works.

Shadow business secretary Rebecca Long-Bailey tweeted: “The Tories’ legacy will once again be industrial decline whilst they endlessly squabble over the European Union.”

The SNP’s Marion Fellows MP said: “The blame for this tragic move lies squarely at the door of the Tory Government. With British Steel citing Brexit-related issues, it is clear that the Tories’ Brexit obsession and failure to get on with the day job is actively harming the ability of businesses to operate and thrive.”