(adds quote from motor industry)
By Matt Falloon and Fiona Shaikh
LONDON, March 12 (Reuters) - The Bank of England on Thursday rebuked claims by British business minister Peter Mandelson that the central bank was dragging its feet over to help for Britain's struggling car industry.
Under pressure to prop up the sector, Mandelson said late on Wednesday he wished the BoE would be quicker in coming to the aid of car purchase finance companies -- an unusual intervention given that the central bank is independent of government.
"The Bank of England is puzzled by Lord Mandelson's comments yesterday," the central bank said in a statement. "It is not the role of the Bank to provide sector-specific support. That is clearly and properly a matter for the Government."
The BoE said it had conducted talks with government departments and the motor industry to explain the way in which the central bank was trying to boost liquidity and get lending flowing again.
It said it had already widened the collateral it accepts in exchange for central bank cash to include consumer and corporate loans, including for those to buy cars.
Its new Asset Purchase Facility is also open to companies outside the banking sector that meet the eligibility criteria, it said. But so far the BoE has only bought gilts and commercial paper through the facility.
CARMAKERS PLEA
The motor industry, however, pleads that many firms such as smaller independent financing companies are not able to take advantage of the BoE scheme and wants the central bank to broaden out its liquidity support.
"We are not seeking special treatment, merely a level playing-field which ensures that all lenders -- whether banks or non-banks -- get the help they need, if they need it," said Stephen Sklaroff, director general of the Finance and Leasing Association.
The BoE has also set strict quality criteria for using its facilities, which many smaller car finance companies may not be able to meet.
Mandelson held talks with car makers on Wednesday and the government said Britain had received clearance from the European Commission to go ahead with a 2.3 billion pound ($3.2 billion) aid package for the industry.
Global policymakers have been urging each other not to resort to protectionism during the economic downturn. Many leading economies have already propped up their more critical banking sectors.
Asked to comment, Prime Minister Gordon Brown's spokesman said: "Lord Mandelson himself said discussions were making progress on this front. Of course, we recognise the urgency of this and there will be further discussions between the Treasury and the Bank of England." (Additional reporting by Sumeet Desai) (Editing by Patrick Graham and Toby Chopra)