Beijing warned the move 'severely undermined the confidence of Chinese companies investing in the UK'

China has condemned British Steel's nationalisation in what may prove to be an early headache for Andy Burnham.

On Thursday, British Steel was formally brought into public ownership by a departing Sir Keir Starmer, who said the move "safeguards a vital national capability".

The steel manufacturer had been owned by China's Jingye Group until Thursday - even as the Government took control of its operations last year.

China's Commerce Ministry has now hit out at the the move, saying it "seriously infringed upon Jingye's legitimate rights and interests and severely undermined the confidence of Chinese companies investing in the UK".

It said: "Disregarding Jingye's significant contribution to the UK economy and society, the British side forcibly took control of the company in the name of national security."

Beijing will "closely monitor" developments and will support Chinese enterprises in using legal means to protect their rights, the statement added.

Mr Burnham, who is set to become Prime Minister on Monday, is now bracing for a international row before his premiership even begins.

Jingye is seeking compensation from the Government and previously said the business was losing £700,000 a day.

China mandates that firms in certain sectors, such as telecommunications, are majority-controlled by Beijing.

The Department for Business and Trade said yesterday it would use powers established in the Steel Act to establish ownership of the plant.

"The Steel Act gives us powers to nationalise steel companies where it's necessary in the public interest, to protect a foundation industry that supports our critical national infrastructure, economy and defence," the DBT said.

Business Secretary Peter Kyle told GB News on Thursday morning would have to "take the big, bold decision" to step in and take the firm into public ownership.

Mr Kyle said the steelworks were a "foundation of our economy", warning against being reliant on imports of virgin steel.

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"If this plant were to disappear, it means that we would be left to the mercy of the international markets," he added.

Virgin steel is made by extracting iron from it original source, as opposed to recycled steel.

Richard Tice, the deputy leader of Reform UK, told GB News the Government had finally listened to him after years of appeals.

Mr Tice said: "I've been saying for seven years that we need to take British Steel back into public ownership and then invest in it - invest in rebuilding the blast furnaces so they're good for the next 50 years. So it's the right decision.

"It's taken them a bit too long since the the recall of Parliament to debate this in April 2025. So finally they've got there.

"The key thing is that they only pay a pound in compensation because there are massive liabilities that come with this, and they've now got to commit to to rebuilding those blast furnaces."

Mr Burnham has suggested he would bring public utilities into "greater public control" and called for Thames Water to be nationalised.

In March, the National Audit Office said the steelworks was costing the Government around £1.3million a day.