Institute of Directors West Midlands chairman John Rider expressed his regret at Modec's predicament, saying it was "a great shame".

And he praised the team for the progress made.

"They did so well to get it to where they are and it is bitter-sweet that this should happen at a time of rising fossil fuel prices.

"It was a real achievement to be the first manufacturer to develop a zero emission commercial vehicle. But it demonstrates the fragile nature of start-ups which do tend to hit rocky patches especially with all the financial uncertainty around. And while they were at the forefront of cutting carbon emissions, and they had done the difficult bit, it is hard when you get to the ramp-up stage.

"Yet the ideas, concepts and the team attracted some very impressive customers."

Mr Rider said it was important to try and save the business and technology for Britain and the Midlands.

"Surely someone in the British motor industry will pick this up. Certainly the IOD would hope it would stay in British hands."