Prime Minister Theresa May pledged to "act in the UK national interest" as she was urged to block a hostile bid for Redditch-based engineering giant GKN.
Mrs May said the Government was "looking closely" at the hostile takeover attempt by Melrose Industries.
GKN, Britain's third-largest engineering company, employs 58,000 people worldwide and specialises in the aerospace and automotive sectors, making parts for companies such as Porsche, Volvo, Airbus and Jaguar Land Rover. It has already rejected two Melrose bids.
Birmingham MP Jack Dromey (Lab Erdington) suggested the Government had the power to intervene because a takeover could damage the UK's defence capabilities.
Speaking in the House of Commons, he asked Mrs May directly to "block this unwanted takeover".
She responded: "Of course the Business Department will be looking closely and have been following closely the issue that he has raised, and I can ensure him that I and the Government as a whole will always act in the UK national interest."
Labour want the Government to stop the takeover until it has investigated claims that it would be bad for the wider economy.
Rebecca Long Bailey, Labour's Shadow Business Secretary, said: "The Government should intervene and take a closer look at Melrose’s bid.
"They cannot sit back and allow for such takeovers to go ahead without appropriate oversight and investigation."
Trade union Unite claimed bankers, financiers, lawyers and public relations executives stood to make around £140 million if Melrose succeeds in its bid for the firm.
It said the "eye-watering" sum includes up to £69 million in financing arrangements, up to £50 million for financial advice, £9 million for legal advice and millions on public relations and professional services.
Unite said the total amount is more than 80 times the average total lifetime wage of a GKN worker.
Union officials are meeting Business Secretary Greg Clark to urge him to block Melrose's bid.
Unite assistant general secretary Steve Turner said: "This is a bid that puts a 'jackpot' payday for a small number of people ahead of the long-term stability of a world-class engineering firm and the thousands of workers who make it a success."
GKN has previously said it was planning to separate its group so the automotive and aerospace sectors functioned separately.
New chief executive Anne Stevens stepped into the role in November when Kevin Cummings, who was due to replace the retiring incumbent Nigel Stein, suddenly left the company.
At the time, the group was preparing for a further write off of up to £130 million in the aerospace division which Mr Cummings used to lead.