Saab Automobile is teetering on collapse for the second time in three years after a Swedish court rejected the company’s plea for protection from its creditors.

The fate of the ailing carmaker now rests with labour unions and suppliers, which must decide whether to push for its insolvency to secure unpaid wages and bills.

Victor Muller, Saab chief executive, appealed for creditors to “remain calm” while the company appealed against Thursday’s decision by Vänersborg district court to block its bid for bankruptcy protection.

The court said it saw little prospect of Saab emerging successfully from its proposed reorganisation plan and could not therefore accept the application.

Union leaders representing the 3,600 workers had been counting on court approval because this would have triggered aid for Saab workers from the Swedish government’s wage guarantee scheme.

Stefan Löfven, head of the IF Metall labour group, expressed disappointment over the decision and said the union could now be forced to push for insolvency “within days” in order to qualify workers for state support.

However, Fredrik Sidahl, head of FKG, the umbrella group for Swedish car parts suppliers, said insolvency was not in its members’ interests.

“If it goes into bankruptcy, suppliers will get nothing, whereas reorganisation might at least allow them to get something,” he told the Financial Times.

Saab has been fighting for survival since its previous owner, General Motors of the US, threatened to shut it down in 2009 after years of heavy losses.

GM eventually agreed to sell the business to Spyker Cars, a tiny maker of high-performance sports cars founded by Mr Muller, a Dutch entrepreneur.

However, Saab continued to struggle and production has been suspended for the past three months amid wrangling with suppliers over unpaid bills.

An agreement was made in June to sell a near 30 per cent stake to two Chinese companies, Pang Da Automobile Trade Co and Zhejiang Youngman Lotus Automobile, in a rescue deal that was supposed to open the Chinese market to Saab.

The plan is still awaiting approval from Chinese authorities and analysts have voiced doubts over the likelihood of it going through. Mr Muller told the FT on Thursday he was confident of getting a green light from Beijing soon.

However, he added, the time between that expected approval and the flow of €245m from the two Chinese companies was “too long” for the company to survive without protection from its creditors.

Saab’s idiosyncratic, aviation-inspired cars – GM used the slogan “Born from Jets” when it owned the brand – had a cult following, but the Swedish carmaker was always one of the industry’s smallest mass-market producers. Sales, which peaked at 132,000 in 2006, have dwindled into the low five figures.

Sweden’s government took a laisser faire attitude toward its two main carmakers – Saab and Volvo Cars – during the crisis, leaving them largely to fend on their own. Volvo was bought last year by Chinese carmaker Geely from Ford Motor for $1.5bn.

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