UK battery company Britishvolt has avoided collapse by securing additional funding for the business.

The future of the start-up business was thrown into doubt over fears it could run out money after the government rejected a £30m advance in funding on Monday.

The business aims to build a factory in Blyth in Northumberland, building batteries for electric vehicles.

The government, which had championed the development, had committed a total £100m to Britishvolt for the project.

Read more: Multi-billion pound North East battery gigaplant facing collapse 'within days'

It is understood the firm wanted to reduce nearly a third of the funding early, but the government refused.

It has now secured cash for the business to stay afloat in the short to medium term, sources confirmed.

Britishvolt has struggled to find investors to help fund the construction of its ‘gigafactory’ in Blyth.

The plant has been expected to create 3,000 jobs. It has, however, already been delayed several times, which has led to doubts over whether £3.8billion project would become reality.

Read more: Northumberland battery firm Britishvolt considers administration

The firm, however, is yet to make any revenue and has in recent months carried out talks to try to secure fresh funds to stay afloat.

The project has been heralded by ministers as an example of ‘levelling up.’ A Conservative aim of investing in communities to reduce economic imbalances in the country, with Blyth being one of the "red wall" seats to turn blue in the 2019 election.

In January this year, the government pledged £100m to Britishvolt to help it build its battery plant, as well attract more private investment for the development.

The promise of government funding helped Britishvolt raise a further £1.7billionn from private investors which included UK asset investment giant Abrdn and fund manager Tritax.

Read more: Vital North East business has to 'refocus and sharpen' as economy in crisis

Back then, the then Prime Minister Boris Johnson hailed the investment as a "levelling up opportunity", while the then Business Secretary Kwasi Kwarteng said the factory and the jobs it was forecast to create was “exactly what levelling up looks like.”

Britishvolt, however, was recently forced to delay the start of production at the plant several times, with the latest company announcement stating it would be delayed again until the middle of 2025.

The firm blamed "difficult external economic headwinds including rampant inflation and rising interest rates," for the delay.

Ian Lavery, the Labour MP for Wansbeck, where the site is based, told the BBC earlier on Monday that he had spoken to the chairman of Britishvolt who said the company had asked the government for £30m for the project to continue.

Read more: New North East battery plant employing 3,000 people DELAYED as statement issued

He said the chairman said the new Business Secretary, Grant Shapps, had said the government was “not prepared to do that” which meant it was likely Britishvolt would go into administration if other funding was not found.

The Department for Business, Energy and Industrial Strategy has said the government is “determined to ensure the UK remains one of the best locations in the world for automotive manufacturing as we transition to electric vehicles, while ensuring taxpayer money is used responsibly and provides best-value.”

On Monday (October 31), however, a spokesperson said the government would not comment on “speculation or the commercial affairs of private companies.”

Sales of new petrol and diesel cars in the UK will be banned and manufacturers are switching to making electric vehicles which requires an increase in battery production from the year 2030.

It is understood Britishvolt will be making batteries for UK car firms Aston Martin and Lotus.

Read next:

If you want to read more great stories, why not subscribe to The Northern Echo for as little as £1.25 a week. Click here.