Five thousand MG Rover employees are to be made redundant this weekend after the failure of a rescue deal.
The DTI announced that the Government and PricewaterhouseCoopers, the administrators, were informed that Shanghai Automotive Industry Corporation (SAIC) was "not willing to acquire either the whole or parts of the MG Rover or Powertrain businesses on a going concern basis out of administration, nor are they willing to establish a UK joint venture incorporating the whole or parts of the MG Rover or Powertrain businesses."
PwC told the Government that it will not be applying for any further government loan to stave off redundancies.
Joint administrator and PwC partner Ian Powell said: "We have received a copy letter from SAIC early this morning which communicates to the DTI that they are not willing to acquire either the whole or part of the business on a going concern basis.
"In light of this important development we have concluded that there is no realistic prospect of obtaining sufficient further finance to retain the workforce while the position with other parties is explored. As we indicated earlier in the week significant redundancies will now be effected."
He added: "We are extremely disappointed that SAIC has decided not to progress discussions to acquire the business. We are very conscious of the impact this news will have on the employees, their families and the businesses dependent on MG Rover Group."
Andrew Goodall
Editor, TaxZone