The Government has stepped in with a £6.5 million loan to prevent redundancies at MG Rover today.

The loan will pay wages and expenses for a week to keep the company afloat in case a possible deal can be secured.

Trade and Industry Secretary Patricia Hewitt last night said the Government had agreed to the funds "in order to avoid the issuing of redundancy notices at MG Rover while efforts are made to keep the business together".

In a statement issued with Tony Woodley, general secretary of the Transport and General Workers' Union, and Derek Simpson, general secretary of Amicus, Ms Hewitt said: "The Government has been in discussion with trade unions that represent workers at MG Rover and the administrators throughout the weekend.

" The Government has agreed to provide the necessary funds to the administrators in order to avoid the issuing of redundancy notices at MG Rover while efforts are made to keep the business together.

" The Government has agreed to assist and work with the administrator and with the unions who will be developing, with all reasonable speed, a realistic business proposition for SAIC (Shanghai Automotive Industry Corporation) and other possible purchasers to consider.

"We will monitor the situation closely and review the adequacy of funds available while there is a realistic prospect of re-engagement with SAIC.

" The Government and unions said on Friday that we would do everything possible to sustain jobs and the future of manufacturing at Longbridge.

"That is what tonight's decision shows we are doing."

A spokeswoman for the Department of Trade and Industry said there would be a review in seven days.

Ms Hewitt would also be prepared to fly to China with trade union leaders and the invitation would be extended to members of opposition parties, the spokeswoman added.

Workers at the ailing car giant will hold a mass meeting today to hear about frantic efforts to save the factory.

Hundreds of workers at engineering companies which supplied the carmaker with components were laid off over the weekend in South Wales and the West Midlands.

Crisis talks were held throughout the weekend between administrators, government officials, company managers and union leaders in a bid to revive a proposed partnership between MG Rover and the SAIC.

The Government task force set up to deal with the crisis will hold its first meeting in Birmingham today.

Administrators from PricewaterhouseCoopers are still assessing whether the firm can be saved.

MG Rover chairman John Towers yesterday said the collapse of negotiations with SAIC last week marked "a real setback" but insisted all hope was not lost.

"Obviously this is a real setback," said Mr Towers.

"It is something that is very distressing for those who are worried if their jobs are secure. "There is still a very strong strategic impetus for SAIC to go ahead with the deal.

"Given the powerful support and involvement of the Prime Minister, the Chancellor, the Secretary of State, the trade unions and a concerted effort on behalf of the DTI to support and renegotiate this process we should have some optimism for the outcome."

Mr Woodley said unions did not want MG Rover to become a political football or take part in a blame game.

"I am appealing for crossparty support because this should not be turned into a political football," he said.

"We don't want to be talking about any blame and using my members for political purposes.

"Maintaining the fabric of this giant factory is crucial so that we can get SAIC to come back into this business deal, because there is a real business logic for that to happen.

"But we will not accept any sackings of the workers while we know there is a general business deal to be explored."