Agreements are being finalised for the 2007 run of Tuscan, Tuscan Convertible and Sagaris to be produced in Europe while fully built powertrains - straight six, four-litre TVR engines including clutch and gearbox – are due to be produced in the UK.

TVR owner Nikolai Smolenski said: "We are extremely sorry that, after a period of uncertainty and raised hopes that we could continue production ourselves in Blackpool, we have had to make this decision."

"We need to secure the future of the company and move it forward. I am afraid we see no other way to do so."

Consultation has begun with staff and the Transport & General Workers Union on redundancy and counselling support is being put in place.

TVR plans to continue with all current arrangements for the supply of cars and parts. Discussions are being held with key suppliers about future relationships.

Mr Smolenski continued: “We are acutely aware of the shock and distress this will cause for our staff and their families. We will ensure that we meet all our responsibilities towards them over the coming months."

"We would also like to express our gratitude to all those who have worked with us over the past months to try to maintain the company in Blackpool."