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PwC said it would carry on talking to interested parties who might want to take over "pieces of the business". The administrators said they would go back to Chinese to see which parts of the business it was still interested in.

Redundant workers could expect £280 a week for every year of service, PwC said. Steps were being taken to sort out what was going to happen for employees who owned Rover cars, but no one was going to lose their car "at a moment’s notice", the administrators added.

Ms Hewitt said that steps were now being taken to help those made redundant and the many suppliers who depended on work from the MG Rover group. "While there was hope of a deal with the Chinese, we focused on that," she said.

"Now there's no hope of a deal with the Chinese, we will focus on helping the workforce and suppliers."

Ms Hewitt pledged a meeting with MG Rover dealerships next Tuesday, and maintained that the £40 million package for suppliers would still be made available.

The UK Government, which put up £6.5 million to keep MG Rover afloat this week, is thought unlikely to be able legitimately to offer further cash. UK and European Union laws said that state aid can only be given if there is hope of a rescue deal.

The Transport and General Workers Union said that its "worst fears" had been realised.

Tony Woodley, the union's general secretary, said: “The one in a million chance we felt our people had has now been taken away.

"We have worked hard this week with the administrators to develop a sound business plan to present to SAIC," Mr Woodley said. "But it does take two to talk and that opportunity has now gone."

Reg Vardy, which operates three of the UK's 93 MG Rover dealerships, said that it expected the appointment of administrators to result in an exceptional charge when it announces its results for the year to April.

The company, which is owed around £600,000 by Rover, said the dealerships accounted for annual sales of around £25 million - representing less than 2 per cent of its turnover.

Sir Peter Vardy, the chief executive of Reg Vardy, said: ''Given the current uncertainty it is clear that as dealers we are not going to be immune from the impact of MG Rovers' situation.''

Automotive News Europe, which broke the original story that MG Rover was in talks with SAIC, said that the Chinese carmaker was likely to participate in a post-collapse fire sale of assets belonging to Birmingham-based carmaker.

"By forcing the British automaker into bankruptcy, SAIC could get just what it wanted all along - MG Rover’s assets without its liabilities," Automotive News said.

A source in China was quoted as saying: "Shanghai Automotive wants the whole package, including MG Rover’s research and development capabilities."

The company is believed to have been deterred from agreeing the initial investment proposal by pensions liabilities.

Reports over a £400 million mismatch in the MG Rover figures have also raised concerns over the carmaker's accounts. According to some analyses of the MG Rover accounts, the company's losses since it was sold by BMW to the Phoenix consortium five years ago amount to £900 million, while its assets, including a £427 million loan from BMW, amount to £1.3 billion.

The apparent discrepancies have been dismissed by MG Rover and its parent company, Phoenix Venture Holdings, but this has not prevented renewed calls for a thorough DTI investigation of the businesses.

Meanwhile, today's reports of the SAIC rebuff came as its joint ventures with Volkswagen and General Motors were preparing to show cars at next week's Auto Shanghai motor show.

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