Britain's MG Rover to shed 5,000 jobs this weekend

British ailing car maker MG Rover will shed nearly 5,000 jobs this weekend as hopes of renewing talks with China's Shanghai Automotive Industry Corp. (SAIC) for a joint venture faded away although a support package from the British government is still around the corner, according to the company's administrators on Friday.

PricewaterhouseCoopers LLP (PwC), which took receivership of the company after it closed its British factory in Longbridge, central England, and filed for a form of bankruptcy a week ago, said they would send out redundancy notices to nearly 5,000 employees this weekend and some 1,000 staff would remain in employment to complete unfinished cars at the plant.

It also indicated that more redundancies could follow.

Earlier, SAIC, a possible Chinese investor, said it would not hold any further talks with MG Rover about a tie-up or any deal to buy the company out of administration.

PwC said SAIC's decision would result in significant layoffs.

British Secretary of Trade and Industry Patricia Hewitt said the news was "devastating".

British Prime Minister Tony Blair was reported as telling a car worker he was extremely sorry over the issue.

"I just want you to know we tried every single thing we possibly could to put the deal together with the Chinese company," said Blair.

He canceled his afternoon election campaigning commitments to travel to central England where he is expected to unveil an aid package for the Rover workers.

MG Rover, which has 101 years of history and is now the only British volume carmaker in this country, employs 6,100 people in Birmingham, central England.

The company had hoped a rescue deal with SAIC would generate cash to allow it to introduce new models and stem falling sales.

The company, which produced 40 percent of cars bought in Britain in the 1960s, has not produced a new model since 1998 and now holds only a three percent share of the market.

PwC, which revealed last week that Rover is losing 20 to 25 million pounds (38 to 47 million US dollars) each month, said that in addition to exploring the potential of a deal with SAIC, PwC had looked into "a number of other inquiries".

"In our view, none of these is capable of resulting in a sale of the complete business," said joint administrator Tony Lomas.

The British government earlier provided an emergency loan of 6. 5 million pounds (12.4 million US dollars) to pay wages at MG Rover for this week.

But the administrators said there is no realistic prospect of obtaining sufficient finance to retain the work force.