SAAB is on the brink of bankruptcy after the car maker admitted it cannot pay the wages and salaries of its 3700 employees.

Losses, sustainable under the previous owner, General Motors, are on the verge of overwhelming Saab's Dutch parent, Swedish Automobile, which was forced to stop salary payments for 1500 factory workers on Thursday. The IF Metall union set the clock ticking on the company, warning it would enforce bankruptcy proceedings to reclaim the unpaid wages within a fortnight.

We're here to stay: Saab

A Saab spokeswoman admitted that about 2200 office workers, designers and engineers might not be paid as Sweden goes into a holiday period. Apologising for leaving production-line staff out of pocket, she said: ''The last thing we want is to be forced to come with this very sad news the day before a major Swedish holiday. We would not have done this if we were in a situation where we had an alternative.''

But she said Saab was not actively preparing for bankruptcy, with the car maker making a final bid for cash by negotiating a sale and leaseback of its Trollhattan factory with unnamed parties.