The peer said that, in making a decision, he had to consider both the immediate impact on the economy of the collapse of a major manufacturer and the firm’s long-term future Lord Mandelson added: “I also have to look very carefully at what sort of contribution we think a company that is under threat in that way will make to Britain’s future manufacturing strength and economic success.”.

Pointing to JLR’s “importance”, he told MPs: “We are talking about £480m spent on research and development by the company, investing heavily in low carbon technology. This is very important, not just for the automotive industry, but for manufacturing in this country.

“I would say it wouldn’t be right for anyone to stand by and see this sort of investment go to the wind just because of the current financial circumstances we are facing.”

Last night, the company said it would ensure its employees were treated with dignity.

Chief executive David Smith said: “It is only right and proper that our response to the unavoidable impact of the credit crunch and a severe reduction in demand includes actions across all grades and functions in the company.

“We don’t expect sales conditions to return to normal levels for some time. If we are to continue to fund and invest in the products and technology that we will need to be successful when customer demand picks up again after the recession, then we have to improve our efficiency and costs, to improve our ability to respond to the marketplace.

“It is critical that Jaguar Land Rover becomes a more efficient and dynamic organisation to face up to the challenges that we will meet in the years ahead.”

Our “Support JLR” campaign is being run together with sister paper the Liverpool Echo and midlands stablemates the Birmingham Post and Mail and Coventry Telegraph.

JLR also employs around 13,000 staff in the west midlands.