VAN maker LDV has had to reapply for administration after a deal to rescue the firm collapsed.

Malaysian company Weststar announced last month that it had entered into an agreement with LDV’s owner, GAZ, to acquire its entire interest in the Birminghambased firm, which employs 850 workers, with many more dependent on the business.

LDV halted production in mid-December after a huge fall in demand for vans, but withdrew an application for administration after the deal was announced, with the help of a £5m Government bridging loan.

But it was revealed yesterday that Weststar had decided not to go ahead with the deal after being unable to raise funds.

LDV said it had been forced to reapply for administration after essential funds to maintain the business and workforce as a going concern had not been made available.

The move dismayed unions and business leaders and led to workers being sent home from the factory.

Joe Morgan, regional secretary of the GMB union, said: “This is really bad, unexpected news. GMB will be seeking immediate talks with the management of LDV, with the Government and with Weststar to see what the options for the future are.

“We are firmly of the view that the UK Government cannot stand aside and let these manufacturing jobs go to the wall.”