London, Sep 19 The British Government has announced a 10-million-pound loan to Indian carmaker Tata Motors for the electric car-manufacturing project in the UK.

The loan, part of a scheme backing low-carbon technology in the motor industry, will support a 25 million pound investment by Tata Motors in its West Midlands base, The Scotsman reports.

In July, Tata Motors had threatened to scrap plans to build electric cars in the UK if it did not receive a 10 million pound loan soon.

The company was furious after being told by officials from Mandelson's Business Department that it needed more time to find out if the venture will be considered for the loan, taking the total waiting time to six months.

In April, Tata Motors registered its expression of interest to apply for the 10 million pound loan to help launch the new Vista electric vehicle, which was unveiled at the Geneva Motor Show this year, and build an assembly line for it in the UK.

Tata Motors' Norwegian subsidiary, Miljo, has already been awarded a six million pound loan and a one million pound grant from the Norwegian Government for electric cars. (ANI)