The Government has agreed to provide a £5 million bridging loan to help push through LDV’s sale to Malaysian company Weststar.

Ian Pearson, business minister, said: “Weststar's proposed purchase of LDV offers the only credible chance of keeping this manufacturing plant in the UK.

"While completion of the deal is not certain, it would have been irresponsible of the Government not to support it going forward. But this is a one-off bridging loan and it cannot be extended."

Weststar was already working with LDV in an export deal which started two years ago, which saw the Malaysian company recieve LDV vans in kit form. The £5m from the Government now gives Weststar more time to get financing through to finalise the deal to purchase LDV.

Westar's plans for LDV are believed to include £50 million of investment, keeping production in Birmingham and doubling production output in the medium term by exporting more vans to Malaysia.

LDV applied for administration on April 29 after its initial attempts to negotiate a sale fell through. The news of a possible sale has given hope to dealers in the LDV network that the franchise could continue into the future and outstanding payments for warranty work will be paid.

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