The firm said demand for structural steel in the UK is only two-thirds of the 2007 level and is not expected to fully recover within the next five years.
The dire prediction has led to a round of cost-cutting which could see the closure or mothballing of parts of the Scunthorpe and Teesside plants putting 1,500 jobs at risk.
Karl-Ulrich Köhler, Managing Director and CEO of Tata Steel’s European operations, said: “The continuing weakness in market conditions is one of the main reasons why we are setting out on this difficult course of action.
“Another is the regulatory outlook. EU carbon legislation threatens to impose huge additional costs on the steel industry.”
A 90-day consultation process will begin soon with affected employees and union representatives.