Jaguar's £50m F-type sports car project has not been scrapped, according to company insiders. They insist it is on hold and will be revived when parent company Ford's finances improve.

The mid-engined rival for the Porsche Boxster was well advanced when the project was frozen earlier this year.

Meanwhile Jaguar is to launch a 2.0-litre, four-cylinder diesel X-type next year, filling a gap in the range. It is also planning an estate car or sports hatch in early summer, providing what a company insider described as “a more level playing field on which to tackle Audi's A4, Mercedes' C-class and BMW's 3-series.”

Apart from a Jaguar-developed version of Ford's Duratorq engine, powertrain engineers are working on V6 and V8 diesel units for the S-type and the new aluminium XJ saloon. These will have applications for Volvo and Land Rover models.

The company says the new XJ will be one in a range of production cars with an aluminium body.