THE government was today accused of trying to nationalise Jaguar Land Rover (JLR) by stealth.

Broker Howard Wheeldon leaked details of talks between the government and JLR over loan guarantees for £175m of funding to help the car manufacturer ride the recession.

JLR employs 15,000 staff, including 2,000 at its Halewood plant.

However, the government is said to be demanding the right to choose a chairman and one director and to veto any big redundancies by owner Tata, the Indian conglomerate which paid £1.15bn for the company last year.

Mr Wheeldon, a senior strategist at the City’s BGC Partners, described the government’s demands as "backdoor nationalisation" after the government said it would only guarantee £175m of £340m in loans to JLR approved by the European Investment Bank and for only six months.

He also claimed the government demanded payment of a 15% premium for its role and called on Tata to inject several hundred million pounds into the business on top of the £900m it has already invested.

Mr Wheeldon said if JLR clinched government backing it could access a further £450m in commercial bank loans.

A government source described the negotiations as "extremely challenging" and said it would be irresponsible just to "hand the money over."

JLR said: "We have always said these discussions would be complex and take time.

"They are ongoing and we are making progress."