According to British newspaper the Guardian, "Tata is trying to raise up to 1 billion pound by September to keep Jaguar Land Rover afloat without government help."

As per the report the Tatas have mandated financial adviser Citigroup to find banks with solid credit rating­prepared to underwrite some of the 340 million pound loan pledged by the European Investment Bank (EIB).

The Tatas are also seeking to tap the debt­markets to help secure the 500 million pound to 1 billion pound short-term financing package needed, the newspaper added.

"Even if Tata can raise more debt and find banks willing to underwrite part of the EIB loans, the cost of the financing will be very high," the Guardian said.

The report further said the Tata Group, which controls Jaguar Land Rover through its subsidiary Tata Motors, will cut or freeze investment plans for new models. More redundancies from its 15,000-strong workforce are also likely.

Meanwhile, the government had revealed its conditions for underwriting part of the EIB loan for the Tatas. These included giving the government the right to appoint a chairman to Jaguar Land Rover, a guarantee that the Tatas would not make any redundancies and provide an additional large injection into the firm.

The Tatas have, however, rejected the government's conditions for underwriting some of the EIB loan to secure immediate and short-term help. "The Indian firm, which remains committed to Jaguar Land Rover, believes it can secure better terms independently," the daily said.

Besides, talks are continuing about putting together a longer-term financing package involving a consortium of banks, led by state-controlled Lloyds Banking Group, the Guardian said.

The conditions for the loans are believed to be more conventional than the terms demanded by the government this month for the short-term package and the Tatas are confident that progress is being made.

The report added that the Tatas are reviewing its spending plans for its UK subsidiary, which it bought 18 months ago, after it became apparent that it would not receive the level of financial backing from government it had hoped for.