The minister said there was a recognition that too much good money had been spent after bad and that the end of the sector could not be forestalled forever.

Assistance sought by Holden in current crisis talks is fuelling ministerial anger. Credit:David Mariuz

A looming policy showdown between economic rationalists and those in favour of a new car assistance plan is shaping as the first major division in the Abbott cabinet, and the first real test of the Prime Minister's economic policy instincts. It comes as the ALP dramatically stepped up the pressure on the government on Thursday to throw a lifeline to Holden.

Former industry minister Kim Carr urged the government not to wait for an interim Productivity Commission report due before Christmas. Declaring there wasn't a single car on the road that had not been subsidised, he said Canberra needed to act within a fortnight or the General Motors board, meeting in Detroit, would vote to shift its operation to China. ''It may well be that as soon as the December meeting, a decision is taken to actually wind down manufacturing facilities in this country,'' he said.

Economic ministers are said to be increasingly cynical about Holden's intentions and are convinced the company's Detroit headquarters has resigned itself to pulling out of Australia, citing, among other things, the imminent redeployment of Holden's chief executive Mike Devereux to China.