HOPES of imminent direct aid for Britain’s cash-strapped car industry – including Ellesmere Port’s Vauxhall site – have been dashed by the Government, according to reports over the weekend.

Treasury sources said there were no firm proposals for an urgent rescue package for the battered sector, according to Sunday newspapers.

Car giant Vauxhall last week said it was asking staff to take sabbaticals on 30% pay as it sought to avoid redundancies amid the economic crisis. Last night Tony Woodley, joint leader of Unite, said “if it was right to bail out the banks, and it was, then it is right to aid manufacturing”.

The Government also reportedly dismissed calls for car manufacturers to be able to tap into the Bank of England’s £200bn liquidity fund that was set up for banks.

The report will come as a blow to the sector, as unions and the car industry trade body warn that the industry could run out of cash within weeks without help.

The Government is believed to be working on a package to help the car industry, although any direct funding is now thought to be unlikely.

The possibility of providing State-backed loans, such as bridging loans on commercial terms and wider guarantees for loans from banks, is being examined.

It is hoped that an announcement will come within days, but the Treasury source reportedly told one Sunday newspaper that no specific proposals had yet gone before Chancellor Alistair Darling.

Around 850,000 people work in the car industry, and almost half of those workers could reportedly be thrown out of work within weeks if the Government does not step in.

Unite, the trade union, is said to believe the UK industry needs £13bn to see it through the recession.

Mr Woodley said: “There is no doubt in my mind that it was the banks and the bankers who created this problem, but we must not allow UK manufacturing to be hit further by this.

“We need short-term financial support to keep companies alive until the market picks up again.”