AvtoVAZ is to prepare a list of key suppliers who will be eligible for support from the carmaker and the regional government, according to Samara region industry minister Vladislav Kapustin.

The move will help struggling suppliers renegotiate debts with banks, Kapustin said following a meeting of the regional government.

Many Russian carmakers have been hit by falling sales and have reduced hours and halted production this year. National and regional governments want to avoid more job cuts which could potentially spark social tensions after years of stability during the past decade of economic boom.

Russia’s car sales are expected to halve this year as consumers tighten belts because of job and salary cuts during the country’s first recession in a decade. The crisis and the credit crunch have also made loans hard to come by, for both car manufacturers and would-be buyers.

AvtoVAZ , in which Renault has a 25% stake, has also denied it plans large scale layoffs after suppliers said the company told them it was overstaffed by about 27,000 workers, according to Reuters.

Company president, Boris Alyoshin denied that any such cuts were planned but the news agency said two participants in a meeting between AvtoVAZ and suppliers claimed the carmaker wanted to fire 27,691 people. Another source confirmed the figure, adding the company was describing the staff as surplus rather than a plan for layoffs.

AvtoVAZ had already decided to halt production for a month during August, sending employees on holiday on two-thirds of average pay.

A source at Tuesday’s meeting in Samara told the RIA Novosti news agency Avtovaz plans to cut 2009 car output to 293,000 vehicles from 801,000 in 2008.