The former owners of MG Rover last night accused the Department of Trade and Industry of "staggering incompetence" over the carmaker's final collapse.
Phoenix Venture Holdings said the DTi torpedoed any hope of a deal with Shanghai Automotive by withdrawing an offer of a £120 million bridging loan in the Long-bridge firm's dying days.
PVH added that the company had received "precious little" support during its five years in charge, adding meetings with the DTi were a "waste of time".
The directors were responding to a National Audit Office report that revealed the Government knew Rover had been in trouble for a year before it collapsed, but the firm's directors had refused offers of help.
The independent financial watchdog also criticised the Government for spending £6.5 million in a last ditch attempt to save the company by giving an extra week to negotiate with SAIC over a proposed joint venture.
A PVH spokesman said: "Of course the directors of PVH were pleased that the Government made the £6.5 million payment because it was money going into the pockets of our employees.
"However, our advice to the DTi was that a deal with SAIC was no longer possible. We had been talking to SAIC for two years and, once they walked away, it was never going to back on again in a week."
The spokesman said it was the withdrawal of a £120 million bridging loan which proved the final straw.
He said: "Because of the need for approval from the Chinese government, there was going to be some delays, and the DTi raised the possibility of a £120 million bridging loan to help.
"DTi officials drew up an agreement, but at the very last minute, the offer was withdrawn. The DTi torpedoed their own plan and the negotiations and, effectively, the future of Rover."
The NAO report said that the Phoenix Four - chairman John Towers, John Edwards, Peter Beale and Nick Stephenson - had been reluc
tant to accept help from the Government despite encountering cash problems from April 2004.
The PVH spokesman added: "We would strongly refute any suggestion that we did not communicate adequately with the DTi. On no occasion was a meeting requested which we did not agree to.
"That said, the meetings we did have were largely a waste of time. In five years we received precious little support or help from the DTi.
"In monetary terms we received just £4 million from the DTi in five years, much less than they are now spending on an investigation into what they got wrong."
Once, the DTi sent two officials to China to speak to SAIC, but the pair failed to talk to the carmaker because they could not speak Chinese, the PVH spokesman claimed.
PVH also accused the DTi of planning for failure rather than success. "Having drawn up a contingency plan, far from keeping this secret they were briefing journalists about it the week before the administration.
"This precipitated a meltdown in confidence among the suppliers, and eventually SAIC. This was staggering incompetence."
A spokeswoman for the DTi said: "The NAO report said the wthdrawal of the £120 million loan was absolutely the right decision.
"We made every effort to have a dialogue with the Phoenix directors, but it was very hard to make contact with them, which meant we had to deal with people at a lower level.
"It is a nonsense to say the DTI caused the collapse of MG Rover. It collapsed because it ran out of money."