Talks are believed to be continuing today.

The funding is vital to allow JLR to combat plummeting orders as consumers, unable to secure credit during the recession, shun the new cars market.

JLR is also depending on the government for cash to develop its latest generation of eco-friendly vehicles, including the LRX vehicle which is tipped to replace Halewood’s Jaguar X-Type model.

Tata is declining to comment on the crucial negotiations, but last night a source close to the deal said: "This looks like an offer designed to be rejected because of extortionate conditions."

It is believed the government is keen to exact as much investment from owner Tata as possible to ensure a fair return for financial support backed by taxpayers’ money.

Garston Labour MP Maria Eagle, whose constituency includes part of the Halewood plant and is home to JLR workers, said today: "There are negotiations going on, but I cannot comment on them.

"My main concern as a local MP is to keep the plant going through the tough times so once things pick up when the recession is over the plant can take advantage of the markets, because it makes damn good cars very well."

The Liverpool ECHO, sister paper the Daily Post and fellow titles covering JLR plants in the west midlands, launched the ‘Support JLR’ campaign in December calling on the government to provide financial guarantees to help the company through the current downturn.

The plant has seen staffing fall as agency and temporary workers were released and a group-wide voluntary redundancy scheme was offered to permanent staff.

Other cost cutting measures include the offer of sabbaticals to staff who have agreed to a one-year wage freeze and a four-day working week in exchange for a pledge of no compulsory redundancies for two years.