The Sunday Times newspaper has reported that Tata is leading the pack of prospective buyers for Ford's Jaguar and Land Rover operations. Citing sources close to the negotiations, the report says Tata has had 'positive meetings' with trade union and government officials, but still faces tough competition from interested private equity firms.

The report also says that Ford could choose a preferred bidder within three weeks.

Other bidders include One Equity, an American private-equity group, and Mahindra, the Indian car group that is bidding with Apollo, another American buyout firm.

While Jaguar is loss-making industry the newspaper cited sources as saying it will lose about US$500m this year, while Land Rover will make more than US$1bn this year.

The sources say that the likely US$3bn price tag will include a one-off payment into the companies' pension funds. They are in deficit, and negotiations with trustees over the level of the payment are continuing, the report said.