Crisis-hit Birmingham vanmaker LDV faced the end this afternoon as buyers Weststar pulled out of the take-over deal that had been set to save the business.

It leaves the 850 workers at the factory, and hundreds more at its distribution network and supplier companies, facing the axe, after directors went back to court.

They reapplied to go into administration after Government funding of £5 million was cut off, leaving the Washwood Heath business with no cash to work with.

The Department for Business revealed it had stopped the funding because Malaysian group Weststar had revealed it could not find investors to back its takeover of LDV and was walking away from the deal.

The £5 million had been short-term bridging loan to enable the deal to take place. The 11th takeover deal had saved LDV from administration last month.

A brief statement on the LDV website today said: “The directors of LDV Group have been forced to reapply for administration to protect the assets of the business.

“This is due to the fact that essential funds required to maintain the business and workforce as a going concern are not being made available.”

Business Minister, Dudley South MP Ian Pearson, said: “We are disappointed with the news that, despite the bridging facility made available by the Government, Weststar of Malaysia has been unable to proceed with its purchase of LDV.

“We gave LDV a breathing space, a bridge to the future, but in the event, unfortunately, Weststar was unable to cross that bridge. This is clearly a worrying time.”