Lord Mandelson, the UK’s business secretary, has warned the Indian owner of Jaguar Land Rover (JLR) to accept a revised proposal to guarantee hundreds of millions of pounds in short-term funding or risk seeing it taken off the table, a newspaper report on Monday said.


The Daily Telegraph said it understood the warning was made in recent days following a fresh funding proposal that was made by the government earlier this month.


The revised deal was understood to have removed a contentious condition contained in the original offer – to which Tata objected – that would have given the taxpayer board representation at JLR. However, it includes a commitment that Tata would not be able to alter the car manufacturer’s business plan without the approval of ministers. It was unclear whether the new terms were acceptable to Tata, the paper added.


People “close to the situation” told the Telegraph ministers were surprised that Tata had not yet provided a response to the latest proposal and said the government was becoming increasingly frustrated with the stance adopted by the company.


At stake is a government guarantee for EUR340m (GBP290m) of European Investment Bank loans, while a separate short-term commercial loan of up to GBP200m was also understood to be being negotiated by the company before a longer-term financing structure was established.


JLR last week said it would end X-type production and axe up to 300 jobs at its plant at Halewood on Merseyside because of the international slump in car sales.


The government was not available to comment on the negotiations with Tata which said that discussions were “ongoing”.