Ministers were under intensifying pressure on Tuesday night to increase and extend the £2.5bn lifeline announced Tuesday for Britain’s car industry, as business and unions warned that tens of thousands of manufacturing jobs were at risk.

Lord Mandelson, business secretary, announced the deal in advance of a summit on Wednesday with important car manufacturers, suppliers and retailers. He told peers the package would help a vital part of the UK’s manufacturing base to make the “cleaner and greener” transformation it needed to compete.