The British Government has refused to lend money to the Russian owned van maker LDV.
Ministers turned down the company's request for a bridging loan of up to £30 million to secure a management buy-out, saying it was up to its parent firm GAZ to fund the losses, reports The Times.
Doubt was also cast over whether LDV's separate application to the European Investment Bank (EIB) for a £26 million loan would be successful unless GAZ used its own money to help the firm.
Meanwhile LDV is in discussion with the Government's business department over a management buyout to turn it into a manufacturer of green electric vans.
A statement from GAZ chairman Erik Eberhardson, leader of the management buyout, said: "We want to explore every avenue possible to save the company and the jobs.
"We still think that the company has a strong potential future as an electric van manufacturer, and the new ownership team, which is separate from GAZ, is prepared to invest its resources in that new venture if the government is able to give a short term loan.
"We are ready to sit down and talk with the government at any stage about what commitments each party is able to put in.
"We hope the government will accept our invitation to do so."
Mr Ebarhardson has put some of his own money into the buyout along with a contribution by GAZ with the total reaching about £3 - 4 million.
LDV employs 900 people in Birmingham with a further 6,000 jobs supporting the firm in the dealer network and supply industry.
Reports of how much LDV is asking the British Government for have differed.
Yesterday reports said the bridging loan was for £40 million while the Times says the EIB loan is for £53 million.