The Government today announced a £270 million loan guarantee to car giant General Motors to help secure its Vauxhall operations in Britain.
Business Secretary Lord Mandelson said an outline agreement today followed detailed and "highly complex" talks between the Government and the United States-owned carmaker.
Union leaders representing workers at Vauxhall plants in Luton and Ellesmere Port welcomed the announcement, saying it would safeguard jobs.
The guarantee will be provided under the Government's Automotive Assistance Programme and will be provided alongside extra support from GM in the US and support from other European governments.
Lord Mandelson said: "I always said the Government would stand foursquare behind Vauxhall and with this announcement today we have kept our word. These are excellent plants employing a first rate workforce.
"We need Vauxhall to thrive as part of Britain's automotive manufacturing base and following our negotiations with GM Europe I am confident it will do so".
Discussions will continue with GM and other European governments to finalise the remaining details of funding terms and arrangements enabling the implementation of the business plan.
Tony Woodley, joint leader of Unite said: "This announcement is great news for British industry. The loan will help save thousands of jobs in Vauxhall's operations and in the 400 companies in its supply chain.
"Nothing could illustrate more clearly the difference between Labour's proactive approach to helping manufacturing and the short-sighted do-nothing attitude of the Tories. With Cameron and Osborne in Downing Street, these jobs would be lost."
Vauxhall employs around 5,000 workers in the UK, including more than 2,000 at Ellesmere Port and almost 1,500 at Luton.
Hundreds of jobs are being lost at Luton, where vans are produced, but Ellesmere Port, which makes the Astra, escaped Europe-wide cuts announced last year by GM.
More than 30,000 people are employed directly or indirectly via General Motors in the UK, and a further 20,000 work in Vauxhall's dealer network.
The threat of job losses in the UK was raised last year when GM attempted to sell its European division, but it later decided to keep the carmaker.
A company spokesman said: "Opel/Vauxhall is very pleased with the announcement from the British Government that it has agreed to provide Opel/Vauxhall with a loan guarantee.
"This represents a strong vote of confidence in the UK automotive industry and, in particular, the contribution made by the Vauxhall brand and its manufacturing operations in the UK.
"The company has been in discussion with the British Government for many months and this very positive conclusion means that Opel/Vauxhall can forge ahead with its restructuring plans and strengthen its product lines and future offers to its customers."
Nick Reilly, chief executive of Opel/Vauxhall, said: "We very much appreciate the support of Lord Mandelson and the British Government, which is a vote of confidence in Vauxhall, helping to sustain jobs and the excellent manufacturing operations we have in the UK."Reuse content