Troubled vanmaker LDV "needs Government money to survive" before any takeover deal can be agreed, Sky sources have said.

Jobs at the LDV factory are under threat

Two overseas companies have approached Lord Mandelson's business department (Berr) about investing in the Birmingham-based firm.

The potential investors are being contacted by the Government to confirm their level of interest, a Berr spokesman said.

"We understand that the management buyout is no longer an option. It has not been approved by parent company, Gaz," he said.

"LDV has also now told us it has been approached by two potential investors. They are overseas companies.

"We are contacting these two potential investors today to find out more information about their level of interest in LDV."

Around 850 workers are employed at the LDV plant and thousands more people work for firms which supply the company.

The vanmaker has not built any vehicles since before Christmas and has been attempting to put together a management buyout for several weeks.

The company has been pushing the Government for a bridging loan, ranging from £4m to £40m, to restart production and press ahead with plans for a new "green" vehicle.

But the Government has rejected the requests, insisting that Gaz should give more money.