But it's a good thing that this car's being produced for the Western market,' the source told IANS.

However, the source confirmed that the new cars will be manufactured 'with Jaguar Land Rover', the British marques that are owned by Tata Motors and have important manufacturing facilities in the midlands region.

Tata Motors is yet to give out details of the Indica Vista Electric Vehicle, prompting local speculation about where the facility will be located and what kind of facilities would be needed.

The Birmingham Post said: 'It is hoped the move would create a significant number of jobs, both directly and through the supply chain.'

Rachel Eade, operations manager at automotive supply chain support body Accelerate, said: 'There is no doubt that this money will help the West Midlands continue the 'drive' and should hopefully place us at the forefront of green technology going forward.'

Announcing the loan last week, Britain's Business Secretary (minister) Peter Mandelson said the loan will help in 'securing and creating high value engineering jobs in the West Midlands'.

'Today we are backing Tata as Tata backs Britain,' he added.

Speculation about new jobs mounted in a week British unemployment hit a 14-year high at 2.47 million.

So far, Tata Motors has only said that the cars will be developed and manufactured in Britain and expressed appreciation for the government loan.