The battery startup Britishvolt is expected to collapse into administration on Tuesday after talks about a rescue bid from several investors failed.

The company’s efforts to build a giant facility near Blyth in Northumberland have stalled in recent months as it has struggled to find a cash injection to pursue the project.

Britishvolt, which employs 300 staff, is expected to file notice of administration in the insolvency courts on Tuesday. It is understood that EY is waiting in the wings to handle the administration, which was first reported by the BBC.

The company had said on Monday that it was in talks over a “majority sale” of the business but those discussions appear to have failed.

Shareholders had been voting on potential new investors in the £3.8bn “gigafactory” project, which was seen as a key pillar in supplying the next generation of electric vehicles built in the UK.

The company’s management had been in talks with a number of potential investors, including existing investors keen not to see the value of their holdings wiped out, and an obscure Indonesia-linked group with little experience in manufacturing.

The Guardian revealed last week that DeaLab Group, a UK-based private equity investor, and an associated metals business, Barracuda Group, were in talks over a £160m rescue deal.

Sources close to the situation said the existing investors had been closer to securing a deal than the Indonesia-linked consortium but “did not have the necessary funding” required to take on Britishvolt. However, ultimately, both appear to have failed to reach a deal.

The administration would come after numerous delays to expected announcements in recent days as executives weighed weaknesses in the bids. Most notably, the company’s leadership had concerns that it had no guarantees that promised follow-on funding would actually materialise, according to two sources with knowledge of internal discussions.

In a letter to shareholders, Britishvolt’s executive chairman, Peter Rolton, said DeaLab was “currently in the process of securing non-binding and binding commitments from its investor consortium”, suggesting that the bidder was still searching for £128m in extra funds.

Talks about the potential cash injection took place on Monday, will an all-staff meeting due to take place in the late afternoon. However, that meeting was pushed back into Tuesday afternoon.

Britishvolt had said it hoped to find funding to secure the “long-term sustainability and funding necessary to enable it to pursue its current plans to build a strong and viable battery cell R&D [research and development] and manufacturing business in the UK”. It planned to build a site capable of making at least 30GW of batteries a year but construction work stopped last autumn as its focus turned to staving off collapse.

Building gigafactories is seen as a key aim by the government, which had pledged £100m in financial support to the project.

Britishvolt last year asked for a £30m advance on the funds but the plea was rejected as the company had not hit certain milestones needed to access the funds. That was reportedly followed by two further requests, for £11.5m and then just £3m, raising concerns in government about the financial stability of the project.

Ian Lavery, the Labour MP for Wansbeck, where the factory was to have been built, said: “The reports regarding Britishvolt this morning are deeply concerning for the future of this gigafactory and the thousands of much-needed jobs it promised to bring to South East Northumberland.

“This development was once the crown jewel of the government’s levelling up policy in the north-east but is now in grave danger of collapsing.”

Britishvolt narrowly avoided entering administration in October after it secured a last-minute injection of £5m from Glencore, the FTSE 100 mining company, which was already an investor. Glencore has a deal with Britishvolt to supply cobalt to the factory, if it is built, and it also has a battery recycling joint venture with the company.