Tata Group’s Jaguar Land Rover and the UK’s Department for Business, Enterprise and Regulatory Reform have refused to comment on media reports they are in secret talks over a GBP1bn (about US$1.5bn) bailout.

Officially, business minister Peter Mandelson has said the British government is considering help for struggling carmakers but would not be providing widespread industrial bailouts.

“We’re analysing very carefully what is going on in this sector and we will make good judgements in good time if it is appropriate for the government to take any action, or possible for us to do so,” Mandelson told Sky TV last night.

“I’ve had discussions with the owners of Jaguar Land Rover in particular because they are under particular strain.”

But he added: “I don’t have an open cheque book. It’s the taxpayers’ money and we have a responsibility to the taxpayer.

“There [is] not going to be a great long list of industrial bailouts. It’s not right, it’s not possible.”

British papers on Thursday said JLR executives had been locked in secret talks with ministers discussing a rescue package for the Indian-owned company but the Daily Mail said such a decision would create a politically explosive precedent.

Unemployment has reached record levels and administrators are about to close a nationwide retail chain with the loss of 27,000 jobs.

With many other major businesses expected to go to the wall in the deepening recession, the government would come under increasing pressure to use public money to prop them up, too, the paper noted.

Help for Jaguar-Land Rover is most likely to come in the form of the taxpayer underwriting its loans, the paper suggested.

The company had said it needed help with its cashflow in the ‘ unprecedented’ financial climate and was understood to be seeking access to GBP1bn over two years – roughly what Tata paid when it bought the company from Ford earlier this year.

The Daily Telegraph said ministers and JLR executives were now in daily contact as they attempt to agree some form of state assistance.

As just-auto has reported, the company has cut some shifts and laid off 850 temporary workers.

Company sources told the Telegraph they believe Mandelson supports Jaguar’s case and is said to have been in direct contact with Ratan Tata, the Indian billionaire behind the Tata group.

But the final decision reportedly rests with prime minister Gordon Brown, who is said to be undecided.

A British government source told the Daily Telegraph no final decisions had been made about Jaguar or the rest of the auto industry. “There is no blank cheque here. We have to be pragmatic,” the source was quoted as saying.