The Doncaster MP said the situation was "urgent and worrying" and nothing should be off the table including nationalisation, the BBC reports.
"These are crucial jobs for communities up and down this country," he said.
Liberty owns 12 steel plants in the UK, including at Stocksbridge, Rotherham, Motherwell and Newport, and employs 5,000.
Mr Milliband said the plants are "a crucial part of our strategic infrastructure, are crucial for the aerospace sector to automotive. Let's hope that Liberty steel can find that the refinancing that it's looking for but the government needs a plan B to make sure whatever happens, these jobs are saved."
The collapse of the company's main financial backer, Greensill Capital, sparked grave concerns about the future of those jobs.
Meanwhile, Sanjeev Gupta, executive chairman of Liberty parent company GFG Alliance, has told colleagues he is ‘enthused’ by the amount of offers he has received from finance firms.
They reflected the ‘strength of the business’ but, due to the scale of their operations, ‘they would take some time to organise’.
GFG has hired a team of advisers comprising PJT Partners, Alvarez & Marsal and Norton Rose Fulbright, to support refinancing efforts and negotiations with Greensill’s administrators, he added.
In a message to senior managers he said: “I appreciate this is an unsettling situation for all our stakeholders and we must work together to keep them informed of the situation.
“This week we have held discussions with trade unions, written to our customers and suppliers, held investor meetings and briefed governments in all our operating territories.
“I take some comfort from the overwhelming support we’ve been given so far, and I feel there is a determination across the board to get behind our people and businesses.”
He added: “Over the past few years, we have gone against the grain to revitalise industrial communities that were at risk of being left behind.
"We’ve built an amazing group together with 35,000 people and many more relying on us right around the world. I will be working around the clock to ensure our people and communities have a sustainable future.”