AN electric car firm which failed in attempts to buy out the Tanfield Group last year, yesterday hinted it may pursue a similar move with the North-East van maker's chief rival.

In October, Liberty Electric Cars, which has its manufacturing base in Cramlington, Northumberland, appealed to shareholders of the Wearside-based Tanfield Group to rubber-stamp a proposal combining the two firms.

It came as Tanfield was preparing for a merger of its Smith Electric Vehicles division with its US partner Smith Electric Vehicles US (Sevus), a deal that went through on January 1.

Yesterday, Liberty's chief executive Barry Shrier hinted his firm may now seek a tie-up with Coventry-based electric van maker Modec, which went into administration last Friday.

In a statement, the company said it believed a combined Liberty-Modec organisation would make a formidable player in the emerging electric vehicle sector.

Mr Shrier said: "I believe Modec needs to be rescued by a UK firm to secure jobs and retain engineering expertise in this country."

In September, Liberty said it had secured a £500m order from the Chinese government to supply motors for high performance green buses, potentially creating more than 500 jobs in the North-East over a five-year term.

Modec, which will continue to trade through administration, is Smith's chief rival in the UK electric commercial vehicle market, having supplied firms including FedEx and Tesco.

Its failure, on the back of cashflow difficulties, after a proposed takeover by a US based stakeholder Navistar fell through, is in direct contrast to the burgeoning fortunes of Smith, which supplies companies including Coca-Cola and Sainsbury's.

As reported in yesterday's Northern Echo, Sevus, in which Tanfield still owns a significant stake, looks set to apply for a US stock exchange listing after announcing it was attempting to raise more than $53m (£33m) through private investors.

That fundraising was completed yesterday, reducing Tanfield's percentage stake in the business from 49 per cent to 32.2 per cent.

Analysts valued this holding at £34m, therefore pricing Sevus at more than £105m.

It will also see Tanfield receive £3m of the £9.7m it was owed by Sevus for the merger deal as a lump sum.