The Italian government rejected ArcelorMittal's latest plan for the loss-making Ilva steel plant on Tuesday which it said included major job cuts and went back on investment pledges as workers held a strike to protest the plan.
The world's biggest steel producer took over the plant in the southern city of Taranto in 2018 but its rescue plans have triggered months of wrangling.
Ministers and labour officials met by video linkup on Tuesday to discuss the latest proposals, which had already prompted unions to call a 24-hour strike.
"Mittal on Friday sent us a new plan which in our opinion is unacceptable for two reasons: it questions job levels and challenges planned investment," Industry Minister Stefano Patuanelli said during a meeting, according to a source who attended the meeting.
After withdrawing its bid to walk away from the deal in exchange for an injection of state funding, ArcelorMittal has presented a plan with new proposals to cut jobs, provoking the ire of the government and the unions.
The company has confirmed sending the plan but has not provided any details. Italian media reported at the weekend that the plan included 5,000 job cuts.
Ilva employs more than 8,000 people and provides work for thousands more as suppliers or contractors.
Patuanelli said the government would try "to reverse" the plan's terms and safeguard all jobs at the plant, one of the few major industrial employers in Italy's economically struggling south.