Thousands of jobs look likely to go at a Birmingham van factory and its suppliers after its plea for financial aid was turned down by the Government.
Owners of the LDV plant asked for a multimillion-pound loan to keep it going after the global downturn halted production of any vehicles for over two months.
A buy-out from the management aimed at rebranding the firm as Europe's first "green" van company is near completion, but its owners - Russian giant Gaz - said the business was "literally running out of cash".
The restructuring would make the firm the first volume producer of electric vans in the UK. But the plan - led by outgoing Gaz chairman Erik Eberhardson - is dependent on a bridging loan of between £20 million and £30 million.
A statement from 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."
It said the firm had been given a previous loan of £24 million which had not been repaid.
© Press Association 2009