It is believed a leaked ‘post-sale integration document’ outlining the benefits of the two companies joining together is already in circulation. The document also shows the firms are looking at the details of cost-saving after the merger. Despite public statements downplaying a merger, sources inside JLR have told the Press Association: “Things are moving quickly behind closed doors.”

An insider who has seen the integration paperwork said: “To have a document like this in circulation at the two firms points to the fact things are very far down the line with either a scale or acquisition.”

However, Jaguar Land Rover (JLR) and PSA, owner of Peugeot, Citroen and Vauxhall denied the sale.

Tata Motors said in a statement: “As a matter of policy, we do not comment on media’s speculation.

“But we can confirm there is no truth to these rumours.”

A spokeswoman for PSA said the company was “open to all opportunities that would create value on a long term basis”.

The spokeswoman said there was “no hurry” for PSA to acquire JLR or any other car maker.

Last month PSA boss Carlos Tavares expressed his interest in expanding the group.

Mr Tavares said he would consider a bid for JLR but would not want the scale of the deal to be a “distraction.”

In January JLR announced it was going to cut 5,000 UK jobs which came after a slump in Chinese sales, a drop in demand for diesel cars and post-Brexit concerns.

The company said it would need more certainty over Brexit for them to continue to invest in UK operations.

JLR sales performance has dropped in recent months with retail sales falling 6.4 percent in the last three months of 2018.

The decline was caused by a sales drop of more than 40 percent in China.

In February the company announced its largest quarterly loss after being forced to write down the value of its investments as Chinese demand dropped.

Since PSA bought Vauxhall-Opel in 2017 its revenue is up 18.9 percent in 2018.

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