A South Australian Senator wants the Prime Minister to make it clear the federal government is willing to do "whatever it takes" to ensure the Whyalla Steelworks survives its latest challenge.
It comes as Greensill Capital, a bank with heavy investment in Sanjeev Gupta's GFG Alliance, files for insolvency after ongoing financial difficulties.
Former Central Alliance member Rex Patrick, who grew up in Whyalla, said Prime Minister Scott Morrison must speak directly to Mr Gupta to obtain a "clear statement of GFG Alliance's challenging financial position".
"Especially as it potentially impacts on the future of the Whyalla steelworks and the hundreds of businesses that provide supplies and services to the business," he said.
Senator Patrick referred to how, during the Arrium administration in 2016, his predecessor Nick Xenophon had enlisted the support of then-Prime Minister Malcolm Turnbull during their efforts to save the steelworks.
"Prime Minister Morrison must now also involve himself in the future of Whyalla and make clear his Government's preparedness to do whatever it may take to ensure that the steelworks continues as a vital part of Australia's manufacturing future," he said.
"Hopefully Mr Gupta will be able to provide the Prime Minster and the Australian public with credible assurances that GFG will be able to weather the storm from the collapse of their financier backer, Greensill Capital.
"In any case the Prime Minister must publicly commit his Government to ensure that the Whyalla steelworks is safe and move without delay to put in place contingency plans to deal with the fallout in the event that GFG Alliance collapses."
Senator Patrick said he was aware that Mr Gupta had written to his Whyalla workers regarding the Greensill situation, but there was "no question" uncertainty was brewing.
"No one can ignore the possibility that we might have a negative outcome for GFG," he said.
"I'm not saying the government should write a cheque at this stage...but I want the Prime Minister to stand up and assure the people of Whyalla that no matter what we will have a steelworks in Whyalla.
"We have to plan for the worst and hope for the best."