Thousands of workers at ailing car giant MG Rover were sent home on full pay yesterday after an emergency Government loan of £6.5 million staved off mass redundancies and frantic efforts continued to save jobs.

Administrators appointed to run the company after the collapse of talks with a proposed Chinese partner said they had no plans to resume car production at the Longbridge factory.

They revealed that without the Government loan they would have announced more than 5,000 redundancies yesterday morning.

The 6,000 Longbridge workers held a mass meeting with union leaders and were told to go home to await developments while efforts continued to revive talks with the Shanghai Automotive Industry Corporation.

A statement from the joint administrators said MG Rover and its Powertrain engine business were incurring "very significant losses", estimated at between £20 million and £25 million per month.

The statement added: "Without external cash support, the companies are unable to pay the vast majority of employees beyond Monday April 11."

Powell, one of the joint administrators from PricewaterhouseCoopers (PwC), said the loan had given a breathing space while efforts were made to contact SAIC to see if the firm was still interested in a deal, as well as pursuing other expressions of interest.

" We have no plans to recommence car production. We have told workers they will be paid until further notice but there is no production going on."

The funding was a "small step forward" and had given them "vital breathing space" to evaluate the interest of all parties.

The money will be used to cover operational costs for a week.

Mr Powell said they were prepared to announce the job losses before the Department of Trade and Industry stepped in on Sunday night.

The situation was being reviewed on a week-to-week basis but he warned that a similar number of redundancies could be announced if no further funding was available.

"If we can't secure funding for next week ... I guess that's the level of redundancies we would have to announce," Mr Powell added.

The administrators stated that although some intellectual property rights for Rover models had been sold to the Chinese under a £67 million deal last year, they could not produce the cars in the Far East.

Any third party who may come in to buy the business could re-acquire the rights in the future, they added.

Tony Lomas, from PwC, said the administrators faced a "significant challenge" in trying to resurrect the talks and he believed any meetings with SAIC would not be held before next week.

"We are doubtful that we will have a substantive conversation with SAIC this week," said Mr Lomas.

He said Chineseine se newspapers were reporting yesterday that the deal with MG Rover could still go ahead.

But he warned: "This is an extremely complex transaction and it will take some time and continued support from all parties involved."

Meanwhile, Jon Moulton, of venture capitalists Alchemy, which failed in a bid for Rover five years ago, said he would be talking to the administrators again but added that the chances of doing a deal were "remote".

He told BBC Radio 4's Today programme that he wanted to know which bits of the company would be for sale. He had no idea if it would be viable to run Rover's sports car operation as a separate concern.

Tony Woodley, general secretary of the Transport and General Workers Union, told the same programme that the Government aid gave a " fighting chance" of saving jobs at Longbridge.

He insisted there was a strong business logic for clinching a deal with the Chinese company.

Mr Woodley said Labour had been very supportive and said it would be clear by the end of the week whether it was possible to prevent the " disastrous closure", which, he said, could cost 20,000 jobs.

Firms that supplied Longbridge with components started laying off workers at the weekend and unions fear that could escalate in the next few days.