Shares in Tata Steel surged 8 per cent, after reports that the company was planning to close a pension scheme.

The Financial Times quoted people briefed on the issue as saying that Tata Steel intends to close the 15-billion- pound British Steel Pension Scheme to future contributions before a 60-million-pound payment deadline on March 31, 2017, in order to plug the mounting deficit.

A 60-day legally required consultation period means an official announcement of the closure is expected by the end of the month, the newspaper said.

"Tata continues to be in active dialogue and engagement with all relevant stake-holders to develop options to support a sustainable future for the business and find a solution to address the costs, risks and volatilities of the British Steel Pension Scheme and the risk this brings to the future of the Tata Steel UK business," a Tata Steel UK statement said, adding that it will keep exploring "viable alternatives" for the pension scheme.

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