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13 October 2015, 16:09 | Updated: 14 October 2015, 06:10
Redcar MP Anna Turley claims the Government has committed an act of "industrial vandalism'' by allowing the permanent closure of coke ovens at the SSI steelworks.
She said ministers should have stepped in to stop the "hard closure'' from going ahead.
But Minister Anna Soubry said the Teesside plant had never been profitable leaving the official receiver with no choice but to close the site.
The clash came during a Commons urgent question secured by Ms Turley following Monday's decision.
Ms Turley said:
"This Government has overseen a tragedy for the people of my constituency and the region.
It is an act of industrial vandalism for British manufacturing.
This is potentially as many as 6,000 jobs in the local area and it is more than just jobs and livelihoods - this is about identity, their pride, their dignity, their respect in work.
It is about the heritage and the history of our local community where people have been involved in steel making for generations. This has been torn away.
But more than our past, this is also our future. There were 50 apprentices due to start with SSI on the day they paused production. Steel underpins the entirety of our economy on Teesside and the Government has turned its back on my constituents, it's turned its back on steel making on Teesside and it's dealt a hammer blow to the UK industry.''
Ms Turley urged Ms Soubry to explain why the Government had not intervened on environmental grounds to save the site, adding the Government had "hidden'' behind state aid rules.
She disputed Government claims any money would end up in the hands of Thai banks and said the official receiver was supposed "maximise the value of an asset and not close it down''.
The Redcar MP said she understood 11 buyers were interested in the site before the shut down.
Ms Turley said:
"Why has the Government allowed 170 years of great British steel making, that built the world from the Sydney Harbour Bridge to the Canary Wharf to just fade away without so much as a whimper?''
Ms Soubry acknowledged at the start of her answer she and the Labour MP were not going to agree - but insisted the Government had done "everything we can''.
She told MPs:
"This is not a decision the Government has taken. This is a decision the official receiver has taken and the official receiver is independent.
It is his decision and he has made it after over a week of trying to forge a potential agreement with buyers, notably of the coke ovens - I don't believe anyone has come forward to buy the blast furnace because we know the reality.
The reality is there is an overproduction of steel across the world and there is under consumption. We haven't even got back to the pre-crisis levels, in fact we are 25% short.
The price of slag which was made in Redcar has almost halved in 12 months. That's why they have never turned a profit, that's year on year they have unfortunately made losses. The coke ovens were making a loss of some #2 million a month but we have done everything we can.''
Ms Soubry said the Government was working with the Health and Safety Executive and the Environment Agency but added the discussions pre-dated the liquidation of SSI, which owned the site.
And she dismissed claims the Government was hiding behind state aid laws. Ms Soubry said:
"There are many stories told about what other countries do and when you dig deep into those stories you find actually they are the stuff of myth - Italy being a particular example.''
One of the things we are very much aware of is the implications through the supply chain and the many thousands of other people, many of whom haven't been paid for some considerable time such was their loyalty to SSI... I want to be in a position where we can help everybody and not just the 2,100 people unfortunately affected by this announcement.''
In her initial statement to MPs, Ms Soubry said the Government understood the "profound'' implications of the decision.
"The terminology is a hard closure, it's a tough closure as well. This is not mothballing so we have to be realistic as to the implications of that.''
Thai firm SSI, owner of the Redcar plant on Teesside, earlier this month applied at the High Court in Manchester to go into liquidation, days after it announced it was mothballing the site.
The closure of the plant yesterday dashed hopes of selling and starting work at the site.
Official receiver Ken Beasley said:
"I have ensured the continued operation of the ovens whilst I dealt with health and safety issues and considered whether there were any viable offers for the ovens. There is no realistic prospect of a buyer being found and the priority now is to close the ovens down safely.
I cannot continue to draw on taxpayers funds to keep the ovens operational when there is no realistic prospect that a buyer will be found.''
Shadow business minister Kevin Brennan accused the Government of adopting an approach of "industrial indifference''.
He said the Government needs a "long-term strategic vision for Britain's economic and industrial future''.
"I'm afraid that for all the rhetoric about northern powerhouses and the march of the makers, at the first big test as to whether this Government has any long term strategic economic vision the march of the makers has come to a stuttering halt,'' he said.
Why has the Government been so passive about working to save the steel industry in this country when it is so strategically important?''
However, Ms Soubry accused Mr Brennan and Labour of trying to score "cheap political points''.