The package announced by Mr Bush on Friday does not need Congressional approval, as it is part of the existing $700bn financial bail-out programme.

All car firms have announced production cuts as the economic slowdown has slashed car sales.

Detroi’s Big Three carmakers, Chrysler, Ford and GM, have repeatedly warned that millions of jobs could be lost if the government does not agree to a package of loans to support the industry.

“These loans were desperately needed before the end of December, because the situation for the automakers is so critical,” said Dennis Virag at Automotive Consulting Group.

Meanwhile, US Treasury Secretary Henry Paulson urged Congress to authorise the use of the second half of the $700bn Wall Street bail-out, as the first $350bn had already been committed.

President George W Bush said allowing the US car industry to fail would not be “a responsible course of action”.

General Motors will get $9.4 billion and Chrysler $4 billion before the end of the year. A further $4bn will be provided later.