Jaguar deal to be agreed within days

Emergency loan before Christmas would protect thousands of jobs

Jaguar Land Rover could receive emergency state aid within days to protect tens of thousands of jobs at the luxury car-maker.

Ministers will continue talks with the company at the weekend in an attempt to reach agreement by Christmas, but have said that they will not be "bounced" into any decision, stressing the responsibility for the firm's future lies with its Indian owner, Tata.

Jaguar has asked for £1bn to help it through the next 18 months. It said that it was not seeking a "bailout", but was requesting short-term loans or loan guarantees because of its problems raising cash from the banks.

The company has argued that it invests £400m a year on research and development, and pioneering technology on diesel engines and four-wheel drive systems.

Gordon Brown said yesterday that no decision had been made on what form of support could be offered, but he praised the quality of research at the company, which employs 15,000 staff in the West Midlands. The Prime Minister said: "[Tata] have taken over one of the best research and development facilities in our country. The Jaguar research development facility is the best in the car industry and one of the greatest facilities in Europe. And they have been investing in new research and development for the future."

Ministers have asked Jaguar for detailed costings of its operation before sanctioning state aid. Pressure mounted on them yesterday after the US government decided to provide billions of dollars in loans to troubled car-makers.

The UK motor industry pointed out that France, Germany and Sweden are also providing emergency help for their companies. General Motors Europe, which employs 5,500 people at Vauxhall plants in Luton and Cheshire, has joined Jaguar in seeking government help.

The pressure facing the automotive sector was underlined yesterday when nearly 300 job losses were announced at the Walsall-based car parts firm Wagon. The company, which makes panels and door parts for Honda, Ford, General Motors, Land Rover and Nissan, went into administration earlier this month and attempts to sell the operation have so far failed.

Derek Simpson, joint leader of the Unite union, urged the Government not to delay in providing short-term financial assistance to the car industry. "Government must establish a strategic funding mechanism for the car industry within days, not weeks," he said. "The urgency of the situation dictates that it must do as it did with the banks and lose no time in intervening with vital assistance. It is simply no good bailing out the banks if the banks won't then bail out business."

*An opinion poll last night indicated that Mr Brown's recent resurgence after his action to try and stave off a credit crisis has come to an end. The YouGov survey for The Daily Telegraph put the Conservatives on 42 per cent (up two on last month), Labour on 35 per cent (down one) and the Liberal Democrats on 14 per cent (unchanged).