CRISIS-HIT car giants – including Jaguar Land Rover – will borrow money directly from the Government, under a radical £50bn fund created as part of yesterday’s second bank bail-out.

The “asset purchase facility” will allow the Bank of England to buy the assets that companies use in order to raise finance, including corporate bonds and syndicated loans, in the latest bid to kick-start lending.

The news came as Lord Mandelson flew to Delhi on a week-long trip which is expected to include meetings with senior representatives at Tata, Jaguar’s Indian owners.

The talks will heighten speculation that further help is in the pipeline for the company, either from Tata – which has already pumped in an estimated £600m of extra cash – or from the Government.

Yesterday’s latest government rescue package is aimed at encouraging banks and financial institutions to buy more bonds – and keep big companies afloat through the recession.

Treasury insiders said the scheme was aimed at big carmakers such as Jaguar Land Rover, which employs 2,000 people at its Halewood plant and has held talks with ministers on a commercial loan of up to £1bn.

A second measure, to guarantee mortgage loans, could be extended to company loans – effectively offering customers a taxpayer loan to encourage them to buy a new car.

The twin moves came as the Treasury unveiled a package of measures to end the credit crunch, in a recognition that the first bank bail- out – October’s £37bn recapitalisation of the major lenders – has failed to achieve that.

Most notably, the debt-ridden banks will be offered insurance against losing more money from their bad debts, although ministers stopped short of creating a “bad bank” to buy up those toxic assets.