British Steel, owned by Chinese company Jingye Group, employs 3500 people at its Scunthorpe plant and supports more in the supply chain.
It has warned it could shut its two blast furnaces, which are losing 700,000 pounds ($A1.5 million) a day, as soon as June.
Its output is used in the UK's rail network as well as in the construction and car industries.
Without the Scunthorpe plant, the UK would be solely reliant on imports at a time of global trade wars and geopolitical instability.
"The government has requested a recall of the House to take forward legislative proposals to ensure the continued operation of British Steel blast furnaces is safeguarded," a note to MPs said.
The lower chamber of parliament, the House of Commons, had been scheduled to be in recess for an Easter holiday until April 22.
Such recalls only tend to happen in extraordinary circumstances, as in August 2021 when MPs were brought back to discuss the withdrawal of troops from Afghanistan.
British Steel has been hit by years of high energy prices and was further damaged by US tariffs of 25 per cent on all imports of steel, which took effect in March.
Asked about the company's nationalisation, UK finance minister Rachel Reeves told reporters earlier on Friday that all options remained on the table to prevent the blast furnaces from closing.
"We recognise the importance both to Scunthorpe for the jobs and community there but also for our national economy to maintain the capacity to make steel in Britain," Reeves said.
The future of the Scunthorpe plant came to a head after the government and British Steel failed to agree a funding deal to switch to a greener type of steel production.
The government had already earmarked 2.5 billion pounds for the steel industry and has said it would publish a strategy on its plans for the sector in the northern hemisphere spring 2025.
In the 19th century, Britain was the world's biggest steel producer but its industry has been in decline, hurt in recent decades by a glut of low-cost production globally and high energy costs for domestic production.
More recently, tariffs have sent shockwaves through the sector.
The UK's steel exports to the United States are worth more than 400 million pounds a year, according to industry body UK Steel, or about 5 per cent of total steel exports.
The nationalisation of British Steel would be the biggest state rescue since a number of banks were taken into government hands in 2008.
