Tata Steel is set to cut 1500 jobs at two sites in the UK.

The Indian steel giant has proposed cutting 1200 jobs in Scunthorpe and 300 in Teesside at its Long Products division, which is loss-making due to falling demand for steel, Tata said.

The firm also said it would invest £400M in the division over the next five years to help turn it around.

The firm said demand for structural steel in the UK was only two-thirds of the level seen in 2007 and is not expected to fully recover within the next five years.

As a result it is proposing closing or mothballing parts of the Scunthorpe plant. It plans to close the Bloom and Billet Mill and associated steel caster (Bloom 750), mothball the Queen Bess blast furnace, which will be kept in readiness for a market upturn, and will review the operations of the Billet Caster.

"We are proposing to take these actions only after going through an inclusive consultative process that involved very careful scrutiny of the Long Products business performance," said Karl-Ulrich Kohler, chief executive of Tata Steel's European operations.

He said the company would do "everything we can to provide [employees] with support and assistance".

In 2010, the company, which employs more than 80,000 people worldwide, recorded a turnover of $22.8bn.