A DEAL with the Government on financial aid for the Indian owners of Jaguar Land Rover was said to be close last night following lengthy negotiations.

Agreement could be reached this week on the deal which is dependent on a £170m loan being underwritten by the Government.

It is understood executives from Tata and JLR met with officials from Lord Mandelson’s department on Friday and have now been examining the details.

It is now believed that no substantial areas of disagreement remain.

The business secretary, Lord Mandelson, and Tata Motors have been locked in negotiations for months over the crucial government loan guarantee to the loss-making car manufacturer, which have become intemperate at times.

It is just days since Lord Mandelson went on TV calling on the company to “quicken the pace” of talks over a guarantee to the loan.

Commenting on the negotiations last month, Phil Woolas, Minister for the North West, said it was a “very serious situation” and that JLR, which employs 2,000 at its Halewood factory in Merseyside, needed to make clear its plans within a “matter of days”. At the time one source claimed Tata had had to wait for months for a “sensible” proposal on the loan deal.

This came just a day after the Daily Post revealed new evidence of the strained relationship between the Government and Tata.

The car giant told ministers it had no plans to axe jobs – just five days before the announcement there would be 300 redundancies.

The relationship between the two sides was made more difficult after a letter leaked by Lord Mandelson, demanding face-to-face talks with JLR’s Indian owners, led to a row between the two sides.