Ministers and unions fear that Liberty Steel faces a “cliff edge”, risking thousands of jobs when the UK’s furlough scheme ends next month, unless owner Sanjeev Gupta can secure a new source of financing after months of delays.

Gupta’s loose conglomerate, GFG Alliance, has been urgently seeking new lenders to plug a black hole after the collapse of Greensill Capital, its key lender, in March. GFG faces a Serious Fraud Office (SFO) investigation into those financing arrangements.

Gupta’s Liberty Steel UK business has faced a severe shortage of cash to fund day-to-day operations since Greensill’s collapse, casting a shadow over the prospects for workers at plants across the country, including a steel plant at Rotherham, South Yorkshire and a factory in nearby Stocksbridge which produces high-strength, anti-corrosive steels for aerospace and oil and gas customers. GFG companies employ 35,000 people worldwide, including about 4,300 in the UK. Of these, about 3,000 work in his troubled steel business.

Liberty’s main UK plants have been running intermittently for months, and it is understood that the salaries of about 70% of its workers – more than 2,000 employees – have been supported by the government’s furlough scheme in the last month. The company has relied on orders and upfront payments from major customers such as jet engine manufacturer Rolls-Royce.

It is understood that Liberty had previously warned government officials that it would face acute financial pressures by the end of August. The removal of the government wage support on 30 September would further add to Liberty’s difficulties as it becomes fully liable for salaries.

Liberty’s continued heavy use of the furlough scheme contrasts with the declining use across the broader UK economy. British businesses reported that 7% of their staff – equivalent to as many as 2 million people – were on full or partial furlough in early August, the Office for National Statistics said on Thursday. Under the scheme, the government will pay 60% of wages up to a cap of £1,875 a month for the hours the employee is on furlough in August and September.

The SFO investigation into suspected fraud, fraudulent trading and money laundering has also complicated efforts to secure new financing from White Oak Global Advisors, a US lender. Gupta has taken a less public role since the investigation was announced and has denied any wrongdoing.

White Oak has already agreed in principle to refinance GFG’s Australian operations, and talks have broadened to include the European operations, which could offer a lifeline to the UK plants. However, governments in other countries – notably Romania and the Czech Republic – have previously objected to GFG transferring funds in the form of carbon credits to other parts of the world.

Liberty officials have told unions that the refinancing of the Australian operations was expected to conclude soon, possibly within a fortnight.

In the meantime, restructuring executives put in place by Gupta at Liberty Steel UK have drawn up a business plan to expand production if the short-term crisis is averted with a new cash injection.

Unions last month sent in an external consultancy, Syndex, to look at the Liberty Steel plans. Its assessment is that the expansion plans were “credible”, but that there were “short-term challenges and the need for financial support in the future,” according to a memo seen by the Guardian.

It is understood that the plans suggest doubling production at the Rotherham plant to as much as 2m tonnes of steel a year.

The union report also objected to GFG plans to put the factory in Stocksbridge, near Sheffield, up for sale. The factory is dependent on supplies from Rotherham, meaning that new owners would have to set up a new supply chain or continue to rely on Liberty Steel.

A GFG Alliance spokesperson said that since announcing a restructuring plan in May it has “introduced a new Liberty Steel UK (LSUK) management team, developed a new organisational structure and established new business plans for LSUK assets which would allow them to resume production and create a sustainable future. We are keeping employees and stakeholders informed as we develop these plans and will issue updates in due course.”