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London, Nov. 29 (PTI): The Tata group has rejected a £10-million loan from the British government, says a media report. The loan was supposed to be used to develop an electric version of one of its existing models.

“The Indian conglomerate Tata group has snubbed Lord Mandelson, the business secretary, rejecting a £10-million loan for a technical centre in the Midlands,” the Sunday Times reported.

Quoting industry sources, the report said the Tatas, owner of premium car brands Jaguar and Land Rover (JLR), had in the past few days told the government that it did not want the money.

“It has decided it can get better terms from commercial lenders,” the newspaper said citing sources.

Last month, Mandelson had announced the loan, saying that Britain was backing the Tatas’ research into electric cars.

The money was awarded as part of the Automotive Assistance Programme, a scheme that was designed to help the UK car industry overcome recession and foster investment in new technology.

The £10-million government loan was designed to bolster a £25-million investment by Tata Motors in its European technical centre based in Warwick University.

The Warwick technical centre was set up in 2005 to develop technology to be used in Tata cars manufactured in India and give the group access to European automotive talent.

It is working on a European version of the Nano, which was introduced on Indian roads this year.

The daily further said the Tatas had declined to comment, while Mandelson’s department for business, innovation and skills said the loan was still on offer.

Earlier, the Tatas and Mandelson were involved in negotiations over an aid for JLR.

According to the newspaper, JLR is also considering whether to close one of its three UK plants as part of a cost-cutting plan.