The Government has offered a £6.5m loan to prevent redundancies at MG Rover today, Trade and Industry Secretary Patricia Hewitt said last night.

The loan will pay wages and expenses for a week to keep the company afloat in case a possible deal can be secured with the Chinese motors firm Shanghai Automotive Industry Corporation (SAIC). It will be reviewed in seven days.

A Department of Trade and Industry spokeswoman said Ms Hewitt would be prepared to fly to China with trade union leaders and the invitation would be extended to members of the opposition parties.

News of the loan came as hundreds of workers at engineering companies that supplied the carmaker were laid off this weekend in South Wales and the West Midlands.

Workers at the Birmingham car plant will today hold a mass meeting when they will hear about efforts to save the plant from closure.

Crisis talks were held over the weekend between administrators, government officials, company managers and union leaders in an effort to revive a proposed partnership between MG Rover and 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 company can be saved.

An immediate problem for administrators is to find out which assets have been sold to SAIC under a £67m deal last year. If it is confirmed that SAIC holds the intellectual property rights to the Rover 25, the 75 and the K series engine then it already has the technology to build Rover cars in China.

Earlier, Tony Woodley, general secretary of the Transport and General Worker's Union, said: "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."

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