The Government has confirmed a grant offer of up to £27 million is to be made available to Land Rover for the production of an all-new car.

The company is due to make a final decision on whether to take the project forward at its plant in Halewood, on Merseyside, later this year.

But, the car would be based on Land Rover's LRX concept vehicle, first shown at the Detroit Show last year, and would be the smallest, lightest and most efficient it has ever produced.

Land Rover has confirmed that if it gives the new car the go-ahead it would be a key addition to the Range Rover family.

Phil Popham, managing director of Land Rover, said: “It would be the smallest, lightest and most efficient Range Rover that we've ever built.”