Jaguar Land Rover is to get up to £27million of taxpayers’ cash to boost the production of an all new car, it was revealed today

Business Secretary Peter Mandelson’s announcement came as Toyota said it was cutting production and wages by 10 per cent. Jaguar Land Rover wants to invest about £400m in the new car.

It will be based on Land Rover’s acclaimed LRX concept. The company says the new model will be the greenest, lightest and most efficient Range Rover ever built, and that the project would save jobs.

The Government is supporting the project with up to £27 million under the Grant for Business Investment scheme. This scheme is separate from a £2.3 billion automotive assistance programme being discussed today by the Treasury and business minister, Dudley South MP Ian Pearson, and motor chiefs.

Although the new Range Rover is to be built at Halewood, Merseyside, its manufacture will benefit West Midlands suppliers as well as research and development jobs in the region.

Lord Mandelson said: “The Government is fully committed to supporting the UK automotive industry as it moves to a lower carbon future.”

Before his meeting Mr Pearson said: “We are going to go through in detail how companies can apply for assistance through this scheme.We are keen to ensure that manufacturing businesses and those in the supply chain can get the loan support they need.”