The Government has never tried to interfere in the management of Jaguar Land Rover, Business Secretary Lord Mandelson has insisted.
He denied claims that attempts to impose a Government-approved chairman had blocked efforts to rescue the West Midlands-based firm.
Lord Mandelson has come under fire for launching a high-profile scheme to help firms such as JLR obtain credit, which has failed to help a single business in the seven months since it began.
In April, the Government announced it had agreed guarantees allowing JLR to borrow £340 million from the European bank.
But the money failed to emerge, amid reports that Ministers had made a series of unreasonable demands.
It was claimed that Ministers had imposed conditions that Jaguar’s Indian owners Tata could not accept, such as the right to choose JLR’s chairman and have a seat on the board.
Speaking to journalists in Westminster, Lord Mandelson insisted this wasn’t true.
He said: “It is not about getting involved in the running of the company. We do not want to have a say in who the chairman is, who sits on the Jaguar board, or who the chief executive is
“But we do need to be confident that the taxpayers’ money that goes into Jaguar will come back out again – that the taxpayer won’t be left high and dry.”
Tata Group was responsible for restructuring its business, he said.
The Business Secretary also warned of future spending cuts and efficiency savings in Whitehall, as the Government seeks to repair the public finances.
He stressed “frontline services” such as police, schools and hospitals, would be protected, but said the next 10 years would see greater restraint in public spending.
Lord Mandelson also said the recession was “coming to an end”. He said: “I think that the fall in the economy is coming to an end, but the severity is not yet behind us.”
The priority was still to achieve economic growth and it was important for the Government to “not lose our nerve”, said Lord Mandelson.
He went on: “Of course there will be spending choices and a growing need for greater efficiency, and less spending.”
He declined to say where the cuts would come, but he did stress there would be “sustained investment in schools, police, hospitals and frontline services including our country’s defences”.
He went on: “Of course we will be operating under greater public spending constraints than we have in the last 10 years and that’s why we we need to respond to it in the way I have described, rather than the way in which the Conservatives have suggested they will set about it.”