The British van maker LDV, whose commercial vehicles are used by fleets across the country, is hoping to transform itself into the country’s first electric van manufacturer.

However, the Birmingham based company, which is undergoing a management buyout (MBO), is searching for additional funding after the Government said it would not provide the estimated £30 million that was needed as a short-term loan.

Erik Eberhardson, leader of a management buyout of LDV, 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.

"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."

The MBO was announced the day before the government said it would not make the loan available.

However, LDV points out that its plans to produce environmentally-friendly vans fits with the Government’s plans to ‘green’ Britain’s auto industry.

Eberhardson said: "LDV can be a symbol of the low carbon, green manufacturing future that the government says it wants Britain to lead.”

Prototypes of low-carbon LDV vans are already undergoing trials with several UK fleets.

An LDV spokesman added: "The Government has talked about backing 'a green industrial revolution' - this project is talk turned into action.”

LDV won a significant £11 million order last week after it won a three-year contract to supply vehicles to Jewson and its sister company Graham.

LDV will supply 500 vehicles, mostly of its best-selling Maxus models.

Despite this recent success, LDV has, like other manufacturers, been hit hard by the global downturn in van sales.

Sales across the van sector have almost halved in the past three months.

Sales of LDV vans fell 42% in 2008.

Now, without help, the vehicle maker will close in “days rather than weeks” said Eberhardson.

Some 850 jobs are at risk at the Birmingham factory, which has already suspended production, with another 1,200 in the LDV dealer network and 4,000 at supplier companies.