Unions and business groups have backed the government’s plan to bail out strategically important companies whose failure would “disproportionately harm the economy”.

Rishi Sunak, the chancellor, is exploring plans for the taxpayer to step in and rescue struggling companies to prevent a wave of job losses in sectors that have been hardest hit during the coronavirus pandemic and lockdown.

The plan, named Project Birch, would see the government support companies on a last resort basis.

Unite, the UK’s largest union, said it was very welcome news that “a rescue plan for UK plc is finally taking shape”. “There is no more time to lose if we are to prevent a tsunami of job losses from sweeping through communities this summer,” he said.

The government is already in talks with multiple companies over possible state aid, with airlines and their aerospace suppliers under particular pressure after lockdown effectively closed the skies.

Virgin Atlantic, the airline controlled by billionaire Sir Richard Branson, and regional carrier Loganair have both said they are looking for government help. Virgin Atlantic plans to cut 3,000 jobs, and has asked the government for a £500m emergency loan. Jet engine manufacturer Rolls-Royce is discussing extra government support through existing research funding programmes.

German airline Lufthansa on Monday said it would receive a €9bn (£8.1bn) bailout from its government, while Air France-KLM earlier this month received €7bn from the French state.

Britain’s carmakers, who employ thousands of workers, are also struggling as factories reopen at slower rates. Jaguar Land Rover is in talks with the government over potential state aid of as much as £1bn, while Aston Martin has said that it is looking at options for further government funding.

Tata Steel, Britain’s biggest steel producer, has reportedly asked both the Welsh and UK governments for financial aid that could run into hundreds of millions.

The government has refused to comment on whether it would partly renationalise the companies it bailouts by demanding equity stakes in return for support. If the government did take equity, those stakes could then be sold if the businesses recover.

A source with knowledge of discussions with government said business leaders had signalled that equity stakes would be acceptable if they were confined to being a “last resort” for companies for whom borrowing more was not an option. The government took equity stakes in some banks during the 2008-09 financial crisis.

A Treasury spokeswoman said: “In exceptional circumstances, where a viable company has exhausted all options and its failure would disproportionately harm the economy, we may consider support on a ‘last resort’ basis. As the British public would expect, we are putting in place sensible contingency planning and any such support would be on terms that protect the taxpayer.”

The government has already put in place support measures including the coronavirus job retention scheme, under which it pays 80% of furloughed workers’ wages, and the Covid corporate finance facility, which offers cheap loans to investment-grade companies. However, there have been concerns that some large employers with viable business models before the crisis have fallen through the gaps of existing government support.

Anneliese Dodds, Labour’s shadow chancellor, said support “must be focused on retaining and increasing employment”.

“It must also build value for our country – with companies receiving support prevented from engaging in share buybacks and dividend payments,” she said. “And it must be in line with our commitments on climate and the natural environment.”

Steve Turner, assistant general secretary for manufacturing at Unite, the union, said: “It’s very welcome news that a rescue plan for UK plc is finally taking shape. There is no more time to lose if we are to prevent a tsunami of job losses from sweeping through communities this summer.”

Tej Parikh, chief economist at the Institute of Directors, which represents company bosses, said: “If key firms do fail it could have a knock-on impact on businesses throughout the supply chain, so its important for the government to consider plans to support them, based on economic impact.”

Government funded equity could be one tool to deal with debt piled up during the crisis from both private lenders and government support schemes, he said. However, he cautioned that the government taking a stake in companies “raises its own questions”.

“Deciding who receives investment won’t be straightforward, while many firms will be less than keen to cede decision-making to a state body,” Parikh said.

Economists have expressed concerns that job losses could rise significantly in the UK as the government prepares to wind down its furlough scheme, which has supported 7.5 million workers. The government is considering plans to make businesses pay for between a fifth and a third of furloughed workers’ salaries.

The unprecedented support for British companies is expected to remain in place until September. Rough estimates by the Office for Budget Responsibility, the government’s spending watchdog, suggest the overall cost could top £84bn.