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A planned government bailout worth tens of millions of pounds to keep Jaguar Land Rover afloat has helped the company’s owners to secure last-minute funding.

Gordon Brown had decided to intervene to prevent the collapse of the carmaker and was preparing to announce a short-term bailout package today or tomorrow. But a combination of tough rhetoric in public and private reassurance appears to have helped the Tata Group to secure enough cash to postpone the bailout until after Christmas.

A state package worth hundreds of millions of pounds will be negotiated in the new year to save a firm claimed by its Indian owner to be of key strategic importance to Britain’s economy.

Meanwhile, Vauxhall’s owners have started talks with trade unions over pay cuts and a four-day week.

The Tata Group, which is headed by Ratan Tata, told ministers that it was facing a cashflow crisis and needed help to pay suppliers. It said that it feared that it might not be able to pay several significant bills falling due today.

Over the weekend Lord Mandelson, the Business Secretary, tested this claim, saying: “The Government cannot be a first call for help in these circumstances. The owners have to look to themselves and their own resources.”

He added: “If there is anything that the government can appropriately do for any such company, then it will have to meet – and pass – some pretty tough tests.”

According to senior Whitehall figures, however, he, Gordon Brown and Alistair Darling, the Chancellor, had already privately agreed that short-term assistance was almost certainly necessary. Tata found the cash because its banks were convinced that the Government would prevent a collapse, a source said. Officials had been working on the details of the package over the weekend.

Jaguar Land Rover employs 15,000 in the Midlands and Merseyside and sustains tens of thousands more jobs through its suppliers and research and development facilities.

Tata told Lord Mandelson that its cashflow problems were caused by the plunging price of steel, one of its key products, and exacerbated by the terrorist attacks in India, where the company has extensive hotel interests. A source said that Tata had been asked to provide further information, but that Lord Mandelson accepted that the group faced “immediate pressures”.

A source close to the talks said: “We’re not yet in a position to know the true situation with Tata, but the feeling is that it’s not worth the risk to confidence to do nothing in the short term.”

A long-term deal will depend on the returns to taxpayers for an exposure that could run into several hundred million pounds, the source added. Negotiations are expected to take between four and six weeks.

Even a short-term bailout for Jaguar Land Rover will increase demands from other struggling companies for government help. Industry insiders said that a number of unions would be furious if the Government tried to suggest that Land Rover was a more deserving case for help than other car manufacturers.

Vauxhall is in talks with unions. A spokesman said: There’s a whole range of things on the table, from changing shift patterns, to pay cuts to getting rid of bonus payments; 2009 is really going to be extremely challenging.” He added: “The key thing that we are trying to avoid is enforced redundancies. We have spent a fortune training our workforce and we are going to need them when things pick up in the future.”

Vauxhall has two manufacturing plants in the UK – in Ellesmere Port, Cheshire, where it builds the Vauxhall Astra, and Luton, where it makes the Vivaro van.

The manufacturer estimates that for every one of its 5,000 workers in the UK another ten workers employed by suppliers, dealerships and other companies rely on the car manufacturer. It has requested credit guarantees from the Government to help to boost car financing.

Vauxhall’s American parent, General Motors, has less than four months to draw up plans to dump billions of dollars’ worth of debt and to cut salary and benefits. Last week the White House made an emergency loan worth $17.4 billion to General Motors and Chrysler to prevent them from running out of cash.

Insolvency experts gave warning at the weekend that, following the collapse of Woolworths and MFI, up to 15 more well-known chainstores could go to the wall in the next month.

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