Lord Mandelson's £2.3bn bail-out of the car industry – ostensibly aimed at shoring up jobs in towns such as Swindon and Luton – could end up being deployed in the pit lanes of Monte Carlo after Honda's formula one team confirmed it was in talks to avail itself of taxpayer-funded loans.

Honda Racing became the UK's first and highest-profile casualty of the global collapse in spending on cars in December when its Japanese parent company announced it would withdraw funding.

Nick Fry, the team's chief executive, has since been seeking a buyer for the team, which has 700 employees at its Brackley base and an annual budget in the region of £200m. Yesterday Honda Racing ­confirmed it had been in talks with Lord Mandelson's Department for Business, Enterprise and Regulatory Reform.

"We have had meetings with BERR over the future of the team on several occasions over the past month," said a statement. Asked whether the team would qualify for the support package, a spokeswoman for BERR said: "There is no reason why Honda Racing couldn't apply.

"We expect any company in the automotive industry or in its supply chain with a turnover of £25m or more to qualify [for the loans] if it has a viable project to deliver the objectives of the support package. All applications will be considered on a case-by-case basis."

The spokeswoman added that the ­government's four key criteria for companies to qualify were having a turnover in excess of £25m, being at the cutting edge of innovation, reducing carbon emissions, and creating jobs.

Honda Racing could claim to qualify on all counts. It easily exceeds the turnover requirement; formula one is innovative almost by definition, as each year brings advances to propel the racing cars faster; the sport is committed to reducing its carbon emissions; and success for Honda Racing would lead to an increase in its workforce.

Reports last month suggested that if a buyer could not be found by 1 February the team would have to be wound up. Honda Racing was keen to dismiss such suggestions yesterday, talking of its optimism that a saviour would be found.

A taxpayer-backed support package for the team would be likely to generate more interest. For now, Honda Racing is concentrating on getting its car on the grid for the first grand prix of the season, in Melbourne on 29 March.