Senior Government Minister Liam Byrne is organising talks between banks and a potential buyer for Birmingham van-maker LDV, in a last-ditch effort to save thousands of jobs after the business applied for administration.

The MP for Hodge Hill, who is also the Minister for the Cabinet Office, is helping Malaysian vehicle importer Weststar to negotiate with British banks, after it failed to obtain funding in its home country.

The firm is seen as a potential saviour for Washwood Heath-bsed LDV, which could close within a week after directors called in administrators.

Prime Minister Gordon Brown told the House of Commons that the Government was willing to offer support for the firm, which is based in Mr Byrne’s constituency - but only if it could produce a viable business plan.

This is likely to mean providing a bridging loan to keep LDV alive while it waits for the European Investment Bank to approve an application for a £53 million credit line.

But the Department for Business, Enterprise and Regulatory Reform has made it clear that no taxpayers’ money will be available unless it is convinced the cash will be returned.

Specifically, it wants LDV’s owners or investors to put in significant funding. This could mean existing owners GAZ, a Russian carmaker owned by oligarch Oleg Deripaska, or a new investor such as Weststar, which has been in negotiations to buy the business. A proposed management buyout has not materialised.

Weststar’s attempts to secure funding overseas were unsuccessful, but they could still step in and save the firm if they can hammer out a deal with a British bank within a week. Mr Byrne, who insists LDV can still have a bright future, is assisting them with negotiations.

The MP said: “A deal is close – with a new investor big enough to back LDV’s shift into the ‘green van’ market.

“I have asked Ministers and officials at BERR to ensure that Government does what it can to ensure that any viable bid reaches a successful conclusion.”

He said the Government had already bought time for LDV by allowing it to delay payment of payroll taxes.

Gordon Brown insisted the Government was willing to help LDV, but warned that the firm’s owners were ultimately responsible for it.

Speaking in the House of Commons, following questions from Birmingham MP Richard Burden (Lab Northfield), the Prime Minister said: “We have had very substantial talks with the company, LDV.

“We have tried to be of help to them. We have said that there is a range of government support available, if they have a business model for moving forward that we can work with and be able to support

“Obviously the responsibility for putting the firm on a firmer footing has rested with the owner and potential investors.

“But we have already set aside money to make it possible for the car industry to receive support from government.”

A BERR spokesperson added: “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 current owner and a potential investor.”

Conservatives accused the Government of failing to act while the business struggled - pointing out that they were highlighting LDV’s problems months ago.

Andrew Mitchell (Con Sutton Coldfield) said: “Either through inability or incompetence, they failed to act in a timely fashion.

“LDV is an important business in the West Midlands and the workforce has been previously let down by this Government.”