Insurers will no longer be making van insurance policies out to new LDV vans after the stricken manufacturer applied to go into administration.
The Birmingham-based firm, owned by Russian giant GAZ, will be forced to apply for administrators after a rescue deal with Malaysian firm Weststar collapsed.
LDV, which employs 850 workers, could see its assets sold off quickly ending any hope of saving the business and the jobs of thousands of people who distribute LDV vans or supply parts and other services.
In a last effort to save the company, LDV appealed to the Government to issue a loan of £60 million to refinance the firm and save around 4,000 jobs at risk.
But the delegation had to be called off after the Prime Minister began a Cabinet reshuffle, meaning no ministers were able to meet company representatives.
The Government has been warned that the collapse of LDV could cost the Treasury up to £53 million in unemployment benefits and lost taxes in the first year, but over £200 million will be lost in wages, purchases and export revenue.
Production at LDV has been suspended since mid-December after a slump in demand.
© Press Association 2009