UK battery start-up Britishvolt could run out of money and go into administration after the government rejected a £30m advance in funding.
The firm wants to build a factory in Blyth in Northumberland which would build batteries for electric vehicles.
Britishvolt was teetering on the brink of collapse on Monday, after ministers turned down a request for emergency funding and the embattled battery start-up made a final effort to secure a private rescue to avoid bankruptcy.
It is understood that the company, which employs about 300 staff, has found it difficult to get an answer over the apparent delay which has forced it to seek cash elsewhere in recent months at a time of turmoil on financial markets.
Britishvolt was founded less than three years ago with the ambitious aim of building an enormous factory that would be able to supply batteries to carmakers. It quickly became a flagship project for the UK automotive industry, and gained the support of the former prime minister Boris Johnson, who repeatedly cited the project as an example of Britain leading the way in the shift away from fossil fuels.
A spokesperson for the Department of Business, Energy and Industrial Strategy, said: “We are determined to ensure the UK remains one of the best locations in the world for automotive manufacturing as we transition to electric vehicles, while ensuring taxpayer money is used responsibly and provides best-value. We do not comment on speculation or the commercial affairs of private companies.”