The company employs 4,500 and up to as many as 20,000 people within the supply chain.
Nic Dakin, Labour MP for Scunthorpe where British Steel's main plant operates, told City A.M. the firm's problems have been "created by the mess the government is making of the Brexit process". However, this has not proved enough to safeguard the company's future and it is urgently seeking a further £75 million worth of loans.
It added: "We are holding constructive discussions with our stakeholders on how to navigate them".
British Steel today said it has asked the government for a support package, believed to be as much as £75m, citing "Brexit-related issues".
It has blamed its predicament on orders drying up because of the Brexit impasse as well as the weakness of sterling and tensions between China and the United States over steel tariffs.
It has also been struggling with the prolonged weakness of sterling since the European Union referendum in June 2016 and the escalating trade US-China trade war.
Sky News, which first revealed the funding request, reported that insolvency experts had been lined up in case it fails to drum up enough capital to stay afloat.
The BBC understands that nationalisation or a management buyout are also being discussed as fall-back options.
GMB national officer Ross Murdoch said: "This government has a track record of sitting on its hands while United Kingdom manufacturing collapses round its ears".
The reports of looming administration come after British Steel was granted a £120million funding package from Business secretary Greg Clark.
It claimed "uncertainties around Brexit are posing challenges for all businesses including British Steel" as unions called on the government to "take action".
"Thousands of United Kingdom jobs are on the line, not to mention the entire future of our proud steel industry", said Ross Murdoch, national officer of the GMB union.
Workers had to take pay cuts and reductions in their pensions in return, and the company recently returned to profit.
Last week, the future of Britain's other major steel maker, Tata, was thrown into doubt after its planned merger with German rival Thyssenkrupp collapsed.
Tata said its United Kingdom business would keep running, but admitted it was facing tough operating conditions in the UK.