The potential saviour of thousands of British steel industry jobs has opened talks with an acquisitive Chinese conglomerate about the sale of a big stake in Monarch Airlines.

Sky News has learnt that HNA Group, which has spent billions of pounds as part of a global takeover spree, has hired bankers to evaluate a possible acquisition of a large minority shareholding in Monarch.

If a deal gets completed, it would represent China's biggest investment to date in a major British airline.

HNA's interest in the British holiday carrier is at an early stage, although the Chinese company has already held talks with the airline's management team, according to people close to the situation.

Bankers at Rothschild have been appointed to work for HNA, which is the owner of Hainan Airlines and this week agreed a $1.5bn (£1.1bn) takeover of Gategroup, the aviation catering group.

HNA already owns Swissport, the ground-handling services business which operates at airports around the world, and is targeting further takeovers in aviation-related assets.

The likelihood of HNA sealing a transaction with Monarch was unclear on Thursday, partly because the European Commission caps the ownership of EU-based airlines by foreign entities at 49%.

Brussels has signalled that it is prepared to ease that restriction, while people close to Monarch say it should not deter HNA's interest because of the potential to explore alternative structures for a deal.

Monarch carries more than 6.5 million passengers annually, and employs almost 3,000 people.

A Greybull spokesman said: "We confirm there is no sale process."