In a letter sent to the Department of Business last night, Sanjeev Gupta said the support was required to pay day-to-day operating expenses and absorb recent losses.
Concerns over the future of Liberty Steel have grown after key financial backer, Greensill Capital, went bust.
Liberty Steel employs about 5,000 people in the UK.
"The collapse of Greensill has put financial pressure on the GFG Alliance and our British steel operations," Mr Gupta writes in the letter.
"We are still refining the details with my management team and our external advisors, but preliminary indications are that the steel manufacturing and processing operations would need in the range of £170m to fund working capital and some additional capital to fund operating losses in the short term, which we are in the process of finalising."
Sanjeev Gupta's GFG Alliance employs a total of 5,000 people in the UK - 3,000 of them in steel and aluminium businesses across 12 UK sites.
There have been grave concerns for the future of Liberty Steel since its main financial backer Greensill Capital went bust in early March.
Government sources told the BBC they have not yet responded and have concerns about the "opaque" nature of Mr Gupta's empire.
GFG employs 35,000 worldwide and given its international footprint the government would certainly need assurances any support would not find its way abroad.
Mr Gupta said he envisaged the support "could be structured in a way that works to ensure value for money and appropriate protections for the taxpayer".
Government sources also indicated that it was unlikely government support would be offered to the company with its current structure and management - with any assistance likely to come after an administration process.
A spokeswoman for the government said: "The government is closely monitoring developments around Liberty Steel and continues to engage closely with the company, the broader UK steel industry and trade unions."
Both the Business Secretary and the Prime Minister have pledged in recent days to look at all options to ensure the business survives.
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