Hundreds of UK workers face an uncertain future after Wagon Automotive, the Midlands-based car parts maker, said today it will file for administration.

Wagon admitted that attempts to agree a last-ditch refinancing package had broken down. It will now be run by administrators from Zolfo Cooper who will try to find a buyer for the business.

The rescue talks collapsed because Wagon's lenders, understood to include Royal Bank of Scotland and Lloyds TSB, refused to support a €50m (£43m) rescue package that would have kept Wagon operating.

Both banks have received billions of pounds of support from the UK government. Wagon's lenders had loaned it €155m earlier this year.

Wagon employs 500 people in the UK. Its factories in Coventry and Walsall make a range of vehicle accessories including door panels, cabins for trucks, hinges and seats.

It employs another 4,500 elsewhere in Europe, and hopes that some of its overseas operations can keep running without the need for insolvency protection.

Wagon has suffered from the slowdown in the auto industry, where sales have fallen to their lowest levels in decades. Its shares were suspended in October when it issued a profits warning.

It is mostly owned by American billionaire Wilbur Ross, who was prepared to inject €10m of his own money into the rescue package. Wagon's customers were also reportedly prepared to contribute €30m to keep it on the road.