Trade unions on Wednesday pressed the Government for a £4 million lifeline to keep LDV, the struggling vanmaker, afloat while rescue talks continue.

LDV, owned by Oleg Deripaska, the Russian oligarch, on Wednesday said that it had applied to go into administration on May 6. As The Times reported on Wednesday, LDV is facing administration because Westar, the Malaysian vehicle importing and sub-contracting group trying to buy LDV, has not been able to conclude a deal in time.

However, it is believed that Westar remains interested and could buy the vanmaker out of administration if it is forced into that position.

Westar has been in discussions about LDV for weeks with Erik Eberhardson, chairman of Gaz, Mr Deripaska's vehicle-making company. It is believed that Westar and Mr Eberhardson, who had initially tried to mount a management buyout, are working together and hope to expand LDV's production by increasing its exports to Asia.

Westar already has an alliance with LDV through which it imports vans and also assembles them from kits.

If LDV goes into administration it will be the first collapse of a vehicle maker in the recession, although some components companies have failed and thousands of jobs have been lost across the automotive industry.

Tony Woodley, joint general secretary of Unite, Britain's biggest union, said: “Unless the Government acts to provide a small but vital aid package of just £4 million, barely a year's bonus for a bailed-out banker, then LDV will go into administration on May 6 — and take with it thousands of jobs in our manufacturing heartland.”

LDV, which had been hoping to reposition itself as a leading maker of electric vans, says 1,000 jobs depend on it directly in its Birmingham factory and in parts of the dealer network that deal only with LDV. However, it is estimated that another 4,000 to 5,000 jobs would be lost from the supply chain.

A Department for Business spokesman said: “We have made it clear to potential investors that, once the company is on a sound footing, it would be eligible to apply for a range of government support. But the first responsibility for putting the company on a sound footing rests with the owner and a potential investor.”

LDV, bought by Mr Deripaska's group two years ago, has applied for administration after some suppliers demanded immediate payment. Most of LDV's suppliers have held off collecting debts while talks to save the company have been continuing.

An LDV spokesman said: “The pressure of the unprecedented global downturn, coupled with the actions of a small number of suppliers, has caused the position of LDV to deteriorate to the point where LDV has been left with no alternative than to apply for administration.”

Mr Eberhardson said: “I fear for the future of LDV. If a solution can't be found this would be a real tragedy given the efforts of all parties over the last two to three months and the hardships that, among others, the loyal workforce and suppliers have endured.

“It is somewhat ironic that since the MBO was rejected, which aimed to transform LDV into an advanced electric van company, the Government has made clear its desire to make Britain a leader in green vehicle technology.”

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