Birmingham Hodge Hill MP Liam Byrne has said he believes vanmaker LDV, which has applied for administration, can still be saved.

The Cabinet Office Minister, whose constituency includes the LDV plant at Washwood Heath, 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.

"The deal I helped to reach with HMRC to delay payment of over £2 million in taxes won us some vital breathing space to pinpoint some big companies with big ambitions for the company. We now need to work non-stop to get those deals closed.

"With a parent company that's serious about LDV's future, we can have serious conversations about Government - and European - support for LDV's electric van plans."

John Hemming, the Liberal Democrat MP for Birmingham Yardley, whose constituency is close to the LDV plant, said quick action was needed if anything was to be saved.

"I have always thought that the Government was intending to see LDV go into administration. I had suggested that they look at alternatives but they showed no willingness to do so," he said. "There is now no time to lose. Whatever is going to happen has to happen very quickly."

LDV chairman Erik Eberhardson, who has been leading efforts to raise money to save LDV, 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."

Mr Eberhardson, who had hoped to secure a management buy-out from parent company GAZ, added: "It is somewhat ironic that, since the management buy-out 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.

"Despite this setback, I will continue to work behind the scenes to try and develop an 11th-hour solution for LDV and save the jobs and production in the UK."