However, it would proceed with the sale of its specialty steel making business, which employs 2,000 employees in Hartlepool, Rotherham and Stocksbridge.
According to analysts, Tata is less concerned about the speed of the sale due to rising steel prices and a raft of government incentives. But it leaves the future of the rest of the 9,000 strong workforce unclear.
In addition to consulting on special legislation to lower pension benefits for many of the 130,000 members of the old British Steel pension fund, the government has offered hundreds of millions of pounds worth of loans and the taking of a potential 25 per cent stake in the business.
Tata acquired the British Steel Pension fund in 2007. It has 130,000 members and a deficit of 700 million pounds (about $900 million).
Business Secretary Sajid Javid will fly to Mumbai to meet Tata executives.
One potential bidder fears that a delay now will see the UK business “wither on the vine” while Tata refocuses its investment on its plants within the European Union.
German engineering conglomerate Thyssen Krupp and Tata have held talks on combining their continental European steel operations, as global overcapacity weighs on prices and profits.