The Russian owners of British commercial vehicle manufacturer LDV have asked the UK government for a loan of up to £30 million ($43.6 million) to save it from collapse, an executive said today.

Erik Eberhardson, chairman of LDV's parent company GAZ, the Russian carmaker, said LDV is running out of money after it suspended production in December.

LDV and the rest of the British car industry have been battered by the global financial crisis. Several car plants have halted production or cut working hours due to a slump in demand.

Commercial vehicle production fell nearly 60 percent in January, compared with the same month last year, industry figures released last week showed.

Britain last month pledged to guarantee up to £2.3 billion of loans to help automakers cope with the recession.

About 850 jobs at LDV's factory in Birmingham, central England, are at risk, as well as 1,200 jobs in its dealer network. About 4,000 jobs at its suppliers could also be hit.

"We need £20-30 million, depending on how we structure it," Eberhardson told BBC radio.

"We need some bridging support and it is fairly small, but it is necessary to keep the company alive and to restart manufacturing," he said.

"Since the company is not producing, it is not making enough revenue to cover its costs. The company is literally running out of cash."

The request could prove awkward for British business minister Peter Mandelson, whose links with GAZ owner Oleg Deripaska dominated political debate in Britain last October.

The former European Union trade commissioner faced calls to resign over his meetings with Deripaska, whose businesses can be affected by EU rules.

Mandelson denied there was anything improper in the meetings, saying they were part of the usual gatherings that take place between businessmen and politicians. Mandelson's department would have to decide whether to offer a loan. The Department for Business, Enterprise and Regulatory Reform would not say if it would give the loan.

"We have been in close discussions with all the automotive sector including with LDV," it said in a statement.

"We have provided considerable support to LDV in recent years and continue to offer them help."

The loan would represent between one third and half of the the amount the company already pays in taxes each year, Eberhardson added.

The money would be used to support the company ahead of a planned management buyout that would relaunch LDV as a maker of electric vans aimed at the "green" market.