Gordon Brown has warned there is no promise the Government will provide aid to Jaguar Land Rover.
And the Prime Minister said talks with the carmaker were ongoing - with no immediate announcement expected. But he also spoke of his admiration for Jaguar Land Rover as a business, highlighting their world class research and design facilities, which are in the West Midlands.
The business has facilities at Whitley, in Coventry, and Gaydon, in Warwickshire.
The fact that Jaguar Land Rover conducts high-level research in the UK is seen by local MPs as a strong argument for ensuring the company is not allowed to fail.
Quizzed on the prospect of state aid for the carmaker, which is owned by Indian firm Tata, Mr Brown said: “To be fair to Tata, they have taken over one of the best research and development facilities in our country.
“The Jaguar research and 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.
“Different industries will have different problems at this time. There is a problem about consumer demand in the car industry.
“We of course talk to the larger companies in our country regularly. But I’ve got no announcement or decision to make about what we can do. These are issues that will be debated over the next period of time, but there is no promise that we’ve made of any support.”
The business, which employs 16,000 people in Birmingham, Solihull and Merseyside, is in negotiations with Alistair Darling, the Chancellor, and Peter Mandelson, the Business Secretary, about receiving Government aid.
It insists it has not asked for a bail-out, but is suffering from the refusal of banks to lend money as a result of the credit crunch.
It has asked the Government either to lend money or to provide guarantees to the banks, which would give them the confidence to start lending again. It has not asked for a grant.
Mr Brown’s comments appeared to confirm reports that no decisin is likely before Christmas, although Ministers are considering making a statement setting out their support in principle for helping the automotive industry.
There is also growing speculation that some carmakers may be singled out for support, with Jaguar Land Rover top of the list because of its commitment to research in the UK.
However, this could cause enormous political difficulty in regions which felt they were being neglected, such as the North East, where Nissan employs thousands of people.
