The Government has appeared to rule out a plea for financial aid to secure the future of a van factory, raising the prospect of its closure with the loss of thousands of jobs.
The LDV plant in Birmingham, which has not produced any vehicles for more than two months following a global downturn in sales, was said to be "literally running out of cash" as the owners asked for a multi million pound bridging loan.
The firm, owned by Russian giant Gaz, announced that a management buy-out aimed at transforming the manufacturer into Europe's first "green" van firm was nearing completion.
The plan, led by outgoing Gaz chairman Erik Eberhardson, would make the firm the first volume producer of electric vans in the UK, but is dependent on a bridging loan of between £20 million and £30 million.
The Business Department said: "We have written to LDV and reiterated our view that the primary responsibility for supporting LDV and the management buy-out rests with Gaz, but in the absence of such support from Gaz, we cannot see a case for further assistance from the Government."
A spokesman said the firm had been given a previous loan of £24 million which had not been repaid, adding: "We are helping and will continue to offer support and advice as LDV continues discussions with Gaz and others on the future of the company."
The plant, in the Washwood Heath district of Birmingham, employs 850 workers and has a dealer network employing a further 1,200, with thousands more employed in firms which supply LDV.
