MINISTERS yesterday pledged to explore guaranteeing bank loans to crisis-hit car manufacturers in a bid to kick-start lending, after an emergency summit.

They pledged to “look at all options” in response to a plea for help from all the major vehicle makers and suppliers, including Jaguar Land Rover and Vauxhall. Key to an aid package requested by the Society of Motor Manufacturers and Traders was a plea for the Government to underwrite lending, to encourage banks to loosen credit.

The lack of credit – despite the billions poured in to prop up the banks last month – is increasingly seen as the biggest obstacle to staving off a deep recession.

Meanwhile, JLR, which employs 2,000 people at its Halewood plant, yesterday announced plans to axe 850 agency jobs at its West Midlands plants.

JLR and Vauxhall joined other manufacturers and key industry suppliers at the crunch meeting with Business Secretary Peter Mandelson and his deputy, Ian Pearson.

Speaking to the Daily Post afterwards, Mr Pearson said both sides recognised that the key task was to “get through the current economic difficulties as quickly as possible”.