Former British Steel firm Corus has been thrust into the bid spotlight after Indian rival Tata Steel said it was considering a takeover approach.

Tata Steel - part of the massive Indian conglomerate Tata Group which owns Tetley Tea - said it was looking at takeover opportunities around the world "including Corus".

Reports in India suggested Tata Steel was willing to pay around £5 billion for Corus, although the Indian firm warned that there was no certainty an offer would be made.

Rumours of a bid for Corus have been rife for months and shares surged yesterday, valuing the Anglo-Dutch producer at £4.1 million - more than double what it was worth little over a year ago.

Various takeover stories have also swept through the City involving companies from India, Russia and Iceland.

Chelsea Football Club owner Roman Abramovich has also been linked with taking a stake in the firm as the steel sector prepares for global consolidation.

Earlier this year, world number one Mittal Steel bought its largest rival Arcelor - sparking speculation that further moves would be made as competitors sought to keep up.

Tata Steel said: "Tata Steel notes the recent media speculation surrounding Corus.

"Given recent industry consolidation, Tata Steel is reviewing a number of global opportunities.

"In this context, Tata Steel is evaluating various opportunities, including Corus.

"However, there can be no certainty that an approach will be made and, if made, that it will result in an offer for Corus."

Last year Corus -which has sites in Wombourne, Dudley, Wednesfield, and Cradley - was the ninth largest steel producer in the world with 18.2 million tonnes of output. This was much lower than Mittal's 63 million tonnes and Arcelor's 46.7 million tonnes.

Tata Steel was the 56th biggest producer with just 4.4 million tonnes of output, but the wider Tata Group is one of India's largest companies with revenues of £12 billion - the equivalent of almost three per cent of India's GDP.

It is made up of almost 100 companies involved in a range of industries from engineering to tea and watch making.

The group was founded by Jamsetji Tata in the mid-19th century as a textile business and now has operations in more than 54 countries.

The power arm is one of India's biggest utilities and is involved in a number of hydroelectric projects and electricity schemes around the world.

It is also India's market leader in academic publishing as part of a partnership with US-based McGraw-Hill with more than 1,000 books in medicine, finance and technology.

Tata Steel was set up in 1907 and is now India's biggest private sector steel firm based at a plant in Jamshedpur, near Calcutta.

The site recently underwent a $2.3 billion (£1.2 billion) modernisation programme and the company claims to be amongst the lowest cost steel makers in the world.

Its products are targeted at the automotive and construction industries.

Corus, which was set up through the merger of British Steel and Dutch group Hoogovens in 1999, employs 47,300 people worldwide, including 24,000 in the UK.

Last year it banked pretax profits of £580 million on turnover of £10.14 billion.

Shares closed up 66.25p at 473.75p.