OSLO, Oct 8 (Reuters) - Sweden's Northvolt said on

Tuesday that one of its subsidiaries had filed for bankruptcy

after the project it was developing was cancelled, while the

rest of the cash-strapped battery making group continued to

consolidate operations.

"All contacts with Ett Expansion AB will from now on be

managed by the bankruptcy trustee," Northvolt said.

The Northvolt unit had been responsible for a planned

tripling of capacity at the group's gigafactory in northern

Sweden, but its board last month cancelled the project.

Northvolt said in September it would slim down and cut jobs,

sparking fears that Europe's best shot at a home-grown electric

vehicle battery champion may stall due to production problems,

sluggish demand and competition from China.

"Northvolt Group continues to be in dialogue with

stakeholders for continued cooperation within Northvolt Group's

ongoing operations," the company added in a statement.

Northvolt has previously received more than $10 billion in

equity and debt financing from players including Volkswagen

, Goldman Sachs ( GS ) and BlackRock, filings show, and has

been trying to raise more money to fund its expensive ramp-up.

"Northvolt Group is concentrating its resources towards

accelerating production in large-scale cell manufacturing within

the fully-built, first phase of Northvolt Ett and delivering on

commitments to its automotive customers," it said.

A spokesperson told Reuters on Sept. 24 that Northvolt had

made significant progress in its effort to raise cash.

At the start of the year, Northvolt had agreed a $5 billion

green loan package with a group of lenders, intended to pay for

a large plant expansion in Sweden, but the cancellation last

month of the construction project put the funding at risk.

"Ett Expansion AB is one of over 20 different entities

within the Northvolt Group and the application for bankruptcy

does not relate to any of the other legal entities in the wider

Northvolt Group," the company said on Tuesday.