Ford has agreed to bail out its struggling Jaguar subsidiary again after it emerged the luxury car maker had clocked up UK losses of more than £600m in 2003.

Jaguar said it does not yet have final figures for 2004 but its chief executive, Joe Greenwell, has already said the company's losses will run into "hundreds of millions of pounds".

The figures underline the costs of Jaguar's failed dash for volume growth, which saw it gear up to sell 200,000 cars a year. In the event it had to settle for 125,000. The losses are reported to have left Jaguar with a negative net worth of £322m.

A year ago Ford gave Jaguar an additional £260m after heavy losses in 2002 and the two companies have agreed that the US car maker will provide further help to bolster Jaguar's balance sheet.

"The Jaguar business was recapitalised in 2003 and a programme of future recapitalisation has been agreed," a Jaguar spokesman said.

The 2003 losses were swollen by a £534m write- down of asset values on the back of the decision to cut back its ambitious annual sales target. Jaguar's 2004 figures will be weighed down by the costs of the recovery programme announced in September.

That will see the loss of 1,150 jobs with Jaguar ending car production at its Browns Lane plant in Coventry - switching the plant's output to Castle Bromwich in Birmingham.

Yesterday a Jaguar spokesman declined to give details of the way in which Ford would carry out the recapitalisation of Jaguar.

One possibility is to swap some of the £490m it owes other Ford companies into equity. Another would be a straight cash injection.

Jaguar has indicated that it does not expect to break even before 2007 and its problems are seen as hampering Ford's hopes of lifting earnings from its luxury car business - which includes Jaguar, Land Rover, Volvo and Lincoln - to $2.3bn (£1.2bn) in 2006.

For Jaguar, intense competition in the US market, which sparked a costly price war, was exacerbated by the fall in the value of the dollar, which damaged its competitive position.

Critics have also suggested that Jaguar was initially slow to respond to the growing demand for diesel-engined cars.

Ford has already taken a $312m charge to cover the costs of the Jaguar recovery plan and the sale of its formula one business.

Yesterday, a Jaguar spokesman said: "Ford has said it is 100% behind the recovery plan that has been proposed."