Multi-millionaire businessman Richard Farleigh is leading the battle to revive Oxonica, the Oxfordshire company that hit a crisis last year.

Oxonica, based at Begbroke Science Park, made 10 people redundant last May, after it lost a £6.1m contract from Turkish oil firm Petrol Ofisi.

In September, it brought in Mr Farleigh, one of its major investors and a former panellist on TV's Dragon's Den, as chairman and raised £4m on the Stock Exchange.

However, the company - an Oxford University spin-off which employs 20 staff at Begbroke and 28 in the US - is still struggling for survival.

It now has £4.8m in cash - enough to last until next year - but its losses leaped by 112 per cent to £5.6m last year, according to results released this week.

Oxonica's shares slumped last April when its fuel-saving additive Envirox failed to come up to expectations in Ofisi's trials. But chief executive Kevin Matthews said a recent trial with British transport company Stagecoach showed a 4.3 per cent fuel saving.

He said: "Stagecoach are using it all over the country, including Oxford, improving their operating finances and reducing their environmental impact. We're asking other bus operators why they're not doing it.

"Bus operators are complaining about fuel costs and the increasing environmental regulations. Our product offers benefits in both of these areas."

Oxonica's revenues have been boosted by sales of Optisol, an ultra-violet screen used in Boots suntan lotion and anti-ageing cream.

The company is pinning its survival hopes on a deal for its loss-making medical diagnostics business, based in the US, which could be sold.

Mr Matthews said: "We're very bullish about Envirox and don't see any significant headcount reduction in the UK at this stage."