Relations between Jaguar Land Rover and government ministers are now so poor they are holding up a £340m loan, reveals Rob Merrick

JAGUAR told the Government it was not planning to axe any workers – just five days before the shock announcement that 300 jobs would go at its Halewood plant, on Merseyside.

The revelation exposes the poor relationship between the company and ministers, which is believed to be holding up the £340m European loan “announced” way back in April.

And it explains why Lord Mandelson confidently told the Daily Post Jaguar jobs were safe – only to be left red-faced by the redundancy announcement the following day.

Since then, the Business Secretary has let slip his frustration at the company's behaviour, complaining it was hard to "pin down" just what it wanted from a government eager to help.

Meanwhile, Jaguar's Indian owners, Tata Motors, owned by Ratan Tats, have waged a media campaign, accusing the Government of demanding a hands-on role in the running of the company in return for the loan – something Lord Mandelson has denied. Matters came to a head last Wednesday when Jaguar suddenly announced it would cease production of the X-Type Jag at the end of this year, costing 300 jobs at Halewood.

Now a senior government source has told the Daily Post the Department of Business, Innovation and Skills (BIS) approached Jaguar on the previous Friday, to inquire if anything "nasty" was looming.

The source said: "Jaguar told us there was nothing coming up – only for the announcement about the redundancies to be made a few days later." Asked how ministers felt, the source replied: "They felt it was odd and showed what things were like."

Last week, Lord Mandelson told the Daily Post he would not allow Jaguar to go broke and said the company had not reached the point of asking for direct government aid.

He explicitly denied he had demanded the right to appoint a new chairman or chief executive and hinted, instead, at problems "reaching agreement with banks about restructuring the company".