The factory, at Halewood, Merseyside, is likely to close for between one and three weeks next month.

The production suspension will involve all 2,200 staff at the factory, which introduced four-day weeks last year.

David Crisp, Jaguar's corporate affairs manager, said sales had been dented by global economic uncertainty and also by the lack of a diesel X-type.

European demand

He added: "We are looking at utilising down time to redress stock levels and achieve a balance between production and stock levels.

"We are reviewing that on an ongoing basis and we will be telling our employees the exact amount later this week.

"It is likely to be somewhere between one week and three weeks."

Mr Crisp said there had been a increase in demand for diesel cars in Europe and that the firm had not been "competing on a level playing field".

Jaguar is planning a diesel launch later in the year, and expects business to pick up.

Last year the Halewood factory produced 75,000 X-type Jaguars.