BRITAIN’s beleaguered carmakers are to make their first appeal for direct financial assistance from the government this week, asking for cheap loans to fund their finance arms and help the restructuring of their manufacturing operations.

The request, to be made to Alistair Darling, the chancellor, signals a departure for Britain’s car industry, which to date has called only for measures to help stimulate demand, such as interest-rate cuts.

The plea comes as General Motors, America’s largest car company, is this weekend negotiating a bailout by the American government.

The talks, involving senior figures in the Bush administration and representatives of President-elect Barack Obama, centre on a radical restructuring of GM that would separate its crippling pension and healthcare liabilities from its automotive operations.

Such a restructuring would consitute one of the largest corporate rescues in history and set a precedent for a wholesale reshaping of Detroit.

Other schemes have floundered in recent weeks because of problems in securing cross-party political support.

In Britain, senior industry sources said that car companies were eager not to be seen “holding out a begging bowl”.

“We are not asking for subsidies for a dead-end sector. We are asking for help to tide a healthy industry over an unprecedented period of turbulence,” said one.

Car sales have fallen sharply in the past two months, with the UK market down 23% in October. Car bosses, working through their trade body, the Society of Motor Manufacturers and Traders (SMMT), decided to make their approach to the government after similar moves by their counterparts in France, Germany and America. Separately, Brussels is working on a €40 billion (£34 billion) assistance package to be administered by the European Investment Bank.

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