Mervyn King, the Bank of England governor, rebuffed a Lord Mandelson proposal to allow the finance arms of car manufacturers access to the “special liquidity scheme” that allows banks to convert illiquid assets into cash, according to government insiders.

The Bank’s reluctance to allow the car companies direct access to the multi-billion pound scheme helps explain why this form of support, signalled some time ago by the business secretary, was absent from the sector’s £2.5bn state lifeline.