The politician said he is working on the deal in his role as consultant to building firm AMEC, which is set to be involved in construction of Britain's next generation of nuclear power stations.

Mr Caborn said: "I'm now working with AMEC and Forgemasters about the possibility of building the largest press in the world which would be able to forge components for the nuclear industry.

"It would be a 16,000 tonne press, putting Sheffield at the leading edge of large forgings. Currently, the biggest press is in Japan.

"If this project goes ahead it would mean billions of pounds of business for Sheffield over the years and help guarantee the future of the industry."

Discussions about the deal are ongoing. Mr Caborn said such large steel parts are needed because of the size of new-generation nuclear power stations.

The Sheffield Central MP made the revelation as Lib Dem Sheffield Council leader Paul Scriven criticised him for taking the £70,000-a-year role with AMEC.

Coun Scriven, who is standing in Mr Caborn's seat at the next general election, said: "This has nothing to do with the day-to-day issues of the people of Sheffield Central. He already gets an MP's salary and claimed more than £138,000 on his expenses last year.

"Many people in Sheffield Central are saying to me they have a self-serving MP rather than a local champion speaking up for the residents of Sheffield Central."

But Mr Caborn, who retires at the next general election, said: "I'm furthering the interests of Sheffield's steel industry within my constituency and am on the brink of a major development."

The MP's other extra-parliamentary duties include consultantcy for the Fitness Industry Association, for which he receives between £10,000 and £15,000 a year.

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