Image caption Victor Muller could be losing his battle to save Saab

The carmaker Saab's application for protection from its creditors to help it avoid being pushed into bankruptcy has been rejected by a Swedish court.

In response, Swedish trade unions said they could demand that Saab be declared bankrupt within days.

Saab had applied for protection while trying to secure additional funding.

Saab had to suspend production in April when its suppliers stopped deliveries after not being paid. Its workers have also had their pay delayed.

Vanersborg district court rejected Saab's application because it did not believe it would work.

Saab said it would appeal the decision.

"We are not dead yet," said Victor Muller, chief executive of Saab's owner Swedish Automobile.

Analysis Swedish Automobile's chief executive Victor Muller is running out of options. He had hoped to raise cash from Chinese investors, or from his former business partner, the Russian banker Vladimir Antonov, or from selling and leasing back Saab's assets. But after months of trying, nothing has been firmed up. Saab desperately needs fresh funds to pay its suppliers and staff. Without it, the carmaker simply cannot keep on making cars. Not that there is much demand for them these days, with many buyers spooked by the crisis. With time running out, it now looks inevitable that Saab's bankruptcy is imminent. Saab's demise seems inevitable

"We were not dead yesterday, we are definitely not dead today."

But industry observers were not convinced.

"They are more or less broke and now the company is in the hands of the unions," said Tom Muller, analyst from Theodoor Gilissen in Amsterdam.

Jay Nagley, of Red Spy Automotive, agreed. "If you can't get bankruptcy protection, than one would assume bankruptcy is the next step," he said.

Union allies

Blue-collar union IF Metall's leader, Stefan Lofven, said: "We will now thoroughly analyse the new situation. If the company itself does not find another solution or seek to put itself into bankruptcy we could be forced to do so in the next few days."

White-collar union Unionen's chief lawyer, Martin Wastfelt, said it might make a similar decision imminently.

"It's all about minimising the risks to secure our members' money," he said.

In an interview with the BBC Mr Muller said he wholeheartedly supported the unions.

"The unions are tremendous allies. The only reason they are applying for bankruptcy is because it is the only way they can get their members paid."

On Wednesday, Mr Muller said Saab's suppliers were owed some 150m euros ($210m; £131m).

He told the BBC the business required a relatively modest amount of new money: "We do not need billions. Saab is a small manufacturer. We will never have the product range of the international giant manufacturers. 245m euros will be sufficient."

Delayed deals

Media playback is unsupported on your device Media caption Redspy Automotive MD Jay Nagley: "It's hard to see how Saab can climb back"

Swedish Automobile, formerly called Spyker, bought Saab from US giant General Motors in January 2010.

Before the summer, Swedish Automobile announced that two Chinese firms would buy minority stakes in the company.

However, these deals have not yet had regulatory approval in either Sweden or China.

They also need to be approved by the European Investment Bank (EIB).

Under the agreements, Zhejiang Youngman Lotus Automobile plans to pay 136m euros for a 29.9% stake, while Pang Da Automobile will pay 109m euros for 24%.

Mr Muller said he was confident they money would be approved: "All indications that we have is that this process is going favourably and very speedily."

But the Chinese government is unlikely to give the two companies the go-ahead, according to car analyst Jay Nagley of Red Spy Automotive.

"The Chinese government is concerned that its car industry is too fragmented," he said.

"It wants to see fewer, larger firms that can compete on the international stage. It doesn't want to see ambitious companies like these two buying a very small Swedish manufacturer."

Jonas Froberg, car correspondent at Swedish newspaper Svenska Dagbladet, said: "People in Sweden love Saab, and they hope it will continue. But many are pessimistic, and have become more so over the summer."