Victorian Premier John Brumby says he is still hopeful a $420 million solar power plant will go ahead in the state's north-west, despite the financial difficulty of the company involved.
Solar Systems was placed in voluntary administration yesterday.
That has called into question the future of the project near Mildura, which was to have produced enough power to run 45,000 homes.
Administrators PricewaterhouseCoopers say the company will operate on a reduced scale over the next three months, while a decision is made to either restructure or sell the business.
Administrator Stephen Longley says up to 100 of the company's 150 staff could be in jeopardy.
"The staff have been stood down without pay pending our immediate analysis of the business this week," he said.
"The current cash position doesn't allow us to trade the business with existing staff levels over the next three months and the payroll is the biggest single cost of the business at this point in time."
Premier John Brumby is hopeful the project will secure finance, because he says it has a strong business case.
"The technology is right and the philosophy is right," he said.
A creditors meeting will be held next week.
The difficulties have arisen from Solar Systems being unable to recruit more financial partners to the project, prompting a key partner to write down its $53 million investment last month.
The Sunraysia Development Corporation's Anne Mansell says it is a serious setback, but she is hoping the administrator can find a way for the project to continue.
"I would believe voluntary administration gives the company quite a bit of hope to be able to resolve their difficulties and hopefully to proceed with their wonderful solar developments in our region," she said.
