UK vanmaker LDV, owned by the Russian GAZ group, on Wednesday said it had applied for administration.

"The pressure of the unprecedented global downturn, coupled with the actions of a small number of suppliers, has caused the position of LDV to deteriorate to the point where LDV has been left with no alternative than to apply for administration," a company spokesman told Reuters.

"This application will be processed on 6 May and the management team will do everything up to that date to secure the future of the business as a going concern," he added.

LDV employs 850 people at its plant in Birmingham, Britain's second largest city hit hard by the closure of MG Rover with the loss of 6,000 jobs in 2005. LDV has not built any vehicles since running into financial problems late last year.

"There continues to be interest from a potential foreign investor who wants to keep manufacturing at Birmingham. We will continue to do everything we can to secure this investment and to support the workforce at this difficult and worrying time," the spokesman told the news agency.

The UK government has said repeatedly that any further funding for the company should come from GAZ, Russia's second largest car producer controlled by entrepreneur Oleg Deripaska, which has been hit hard by a slump in domestic sales.

LDV had last month asked the government for between GBP4-5m as a bridging loan ahead of a planned management buyout (MBO).

"It is somewhat ironic that since the MBO was rejected, which aimed to transform LDV into an advanced electric van company, the government has made clear its desire to make Britain a leader in green vehicle technology," Erik Eberhardson, leader of the planned buyout and GAZ chairman, told Reuters.

"Despite this setback, I will continue to work behind the scenes to try and develop an 11th hour solution for LDV and save the jobs and production in the UK," he added.

"We are still working with potential overseas investors who want to keep production in Birmingham, but they like many people at this time are finding it difficult to secure the necessary funds," LDV Group CEO Evgeniy Vereshchagin said in a letter to employees posted on the company's website.

Though the deterioration in the position of the business had forced the directors to apply for administration, Vereshchagin said it did not mean the business was in administration yet.

"Our application will be processed on 6 May and we still have until that time to secure funding for our plans," he said.

Hourly paid and staff have been paid up to the end of last week and the company was unable to confirm any further payments.

Only senior management team would report for work until further notice and all employees were requested to leave the site after the briefing in which they received the letter "and await further information at home".

Local television reports said LDV's Washwood Heath site was all but deserted at 13:00BST Wednesday (29 April).

If LDV collapses, it would be the first UK automaker to go under in the current recession.