MPs yesterday heard of the desires of Ministers to hand over £110 million to save MG Rover and the role of civil servants in stopping them.
Catherine Bell, who was Acting Permanent Secretary and the most senior official in the DTI at the time, told the Commons Public Accounts Committee she had argued against relaxing the restrictions on the loan.
She said: "Naturally everybody was concerned to see whether there was any way forward.
"Against that, it was my responsibility to constantly comment on what the risks were.
"It was not my advice as the accounting officer that the restrictions should be relaxed.
"My view as acting officer was that there was a very significant sum at stake, but there were many variables in this."
Ms Bell was quizzed by MP Greg Clark, who asked her: "I surmise from what you have said that in terms of relaxing the loan criteria, the pressure came from Ministers rather than officials?"
She replied: "The desire to see the deal come to completion came over very strongly from Ministers, in a very complex situation."
Ms Bell denied that any DTI decisions had been affected by the fact that a General Election was just around the corner. The poll took place in May 2005.
She said: "We felt there was a prospect that SAIC would indeed buy MG Rover."
Inspectors appointed by the DTI are carrying out an investigation into Rover's affairs under the Companies Act.
Earlier this month, the former PVH directors hit back at criticism and accused the Department of Trade and Industry of "staggering incompetence" over the carmaker's final collapse.
They said the DTI torpedoed any hope of a deal with SAIC by withdrawing an offer of a substantial bridging loan in
the Longbridge firm's dying days. PVH added that the company had received "precious little" support during its five years in charge, adding meetings with the DTI were a "waste of time".
* Midland MP Peter Luff, chairman of the Commons Trade and Industry Select Committee, yesterday said the failure of MG Rover could well turn out to be "one of the biggest mis-handlings of a British manufacturing collapse in recent history".
Urging local business lead-ers to supply 'on-the-record' evidence for his committee's forthcoming inquiry into the collapse of the company, the Conservative MP for
Mid-Worcestershire said: "Everyone is falling over themselves to give me private, off-the-record evidence. Public, on-the-record evidence is a little harder to get hold of."
Mr Luff told an Institute of Chartered Accountants business breakfast in Birmingham that his committee would be investigating then Trade Secretary Stephen Byers' decision to sell MG Rover to the Phoenix consortium rather than Alchemy Partners in May 2000.
The DTI committee investigation would study the Public Accounts Committee's conclusions and consider what further investigation would be needed.