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Administrators were officially called in to LDV's Birmingham headquarters following a hearing at the Birmingham Crown Court.

According to administrators PricewaterhouseCoopers (PWC), the "vast majority" of workers at the firm's Washwood Heath facility would be made redundant.

A representative of PWC says: "Sadly we do not have the funding  necessary to keep employees on, so it is with great regret that we place ourselves in a position where we will have to make redundant later today the vast majority of the workforce."

John Kelly, partner at business rescue and restructuring firm Begbies Traynor, believes LDV's situation was inevitable. He says: "The final demise of LDV, while disappointing, comes as no surprise to the vast majority of people in the industry, as the company has been loss-making for a considerable period of time.

"The belief that, with the Maxus, it could compete with an already overcrowded market was unrealistic; particularly when it would appear little was done to update the vehicle."

Kelly added that the closure of LDV is a knock-out blow for the West Midlands and predicts that "this is not the last of the bad news for the automotive supply chain".

The firm's future  looked to be secured after Malaysian vehicle supplier Weststar agreed to buy the beleaguered van manufacturer from its Russian owner GAZ, but following due diligence, Weststar was left with a £45m funding shortfall, causing the buyout to fall through.

In a last-ditch effort to stave off administration, LDV asked the government for a £60m loan, saying the money would ensure its long-term future and "create a profitable new business". LDV was aiming to relaunch itself as a 'green' vehicle manufacturer with an all-electric version of its Maxus van.

A statement from LDV at the time said that the cost of letting LDV fail would be far greater to the Treasury than if it were to provide the necessary funding. The statement read: "The cost to the Treasury alone will be up to £53m in unemployment benefits and lost taxes in the first year. 4,000 British jobs are at risk with more than1,000 in the Midlands region and many around Washwood Heath."