British battery company Britishvolt avoided collapse by securing additional funding for the business, according to the BBC.
The start-up’s future has been thrown into doubt over fears it will run out of money after the government rejected a £30m funding advance on Monday.
The firm wants to build a factory in Blyth in Northumberland which would manufacture batteries for electric vehicles.
The government, which had championed the development, had committed £100 million in total to Britishvolt for the project.
It is understood that the company wanted to take almost a third of the funding at the start, but the government refused.
He has now secured cash to keep the business afloat in the short to medium term, sources with knowledge of the matter said.
The sources would not comment on the identity of the new backer(s).
Britishvolt has struggled to find investors to help fund the construction of its so-called gigafactory in Blyth.
The plant was expected to create 3,000 jobs but has already been delayed several times, leading to doubts that the £3.8billion project will become a reality.
But the company, which has yet to make any revenue, has been in talks in recent months to try to secure new funding to stay afloat.
The scheme has been heralded by ministers as an example of ‘leveling up’ – a Conservative aim to invest in communities to reduce the country’s economic imbalances – with Blyth being one of the ‘Red Wall’ seats to become blue in the 2019 general election. .
In January, the government pledged £100m to help Britishvolt build its battery factory, as well as attract more private investment for development.
The promise of government funding helped Britishvolt raise a further £1.7bn from private investors, including UK asset investment giant Abrn and fund manager Tritax.
At the time, then Prime Minister Boris Johnson hailed the investment as a “leveling opportunity”, while then Business Secretary Kwasi Kwarteng said the plant and the jobs she was to create were “exactly what leveling looks like”.
However, Britishvolt has recently been forced to repeatedly delay the start of production at the plant, with the company’s latest announcement saying it will be delayed again until mid-2025.
The company blamed “difficult external economic headwinds, including runaway inflation and rising interest rates”, for the delay.
Ian Lavery, the Labor MP for Wansbeck, where the site is based, told the BBC earlier on Monday that he had spoken to the chairman of Britishvolt who said the company had asked the government for £30million for the project continues.
He said the president had said new business secretary Grant Shapps had said the government was ‘not ready to do this’ meaning it was likely Britishvolt would go into administration if no other funding was found.
The Department for Business, Energy and Industrial Strategy said the government was “committed to ensuring that the UK remains one of the best places in the world for car manufacturing as we transition to vehicles electricity, while ensuring that taxpayers’ money is used responsibly and provides the best value”.
But on Monday, a spokesman said the government would not comment on “speculation or business affairs of private companies”.
From 2030, sales of new petrol and diesel cars in the UK will be banned and manufacturers are shifting to making electric vehicles, necessitating an increase in battery production.
Britishvolt has already entered into memorandums of understanding to manufacture batteries for British carmakers Aston Martin and Lotus.