AS talks go on to put together a rescue package for the DAF truck

organisation, the issued surfaced yesterday at Prime Minister's Question

Time.

In heated exchanges Mr Major declared that the receivers had made

clear that at least parts of the company could be saved as a

commercially viable business and ''that is the way to proceed,'' he

declared, to Labour protests.

Mr Major was replying to Labour leader Mr John Smith, who said it was

''vital'' to British manufacturing industry that the company should not

be allowed to collapse. He demanded: ''Will you undertake that if the

Dutch and Belgian Governments rescue their parts of the company, the

British Government will do at least the same for Leyland DAF?''

Mr Major replied: ''The receivers appointed yesterday at Leyland DAF

have made it clear that they believe at least parts of the business can

be saved as a commercially viable business without unnecessary state

hand-outs. I believe that is the way to proceed.''

Mr Smith countered: ''Don't you understand the concern that exists in

this country because of the Government's record of neglect of

manufacturing industry and the hesitancy and ambiguity of statements

made by the Government?''

To Labour cheers, he demanded ''a clear undertaking that you will do

for Britain what the Dutch and Belgian Governments will do for their

countries''.

Mr Major retorted: ''You are asking us to do what has been tried in

the past by previous Labour Governments and others and has failed.'' He

urged Mr Smith to recall the ''disastrous outcome'' of Labour's merger

of Leyland and the British Motor Corporation.

''Millions and millions of pounds of taxpayers' money later they had

to nationalise it costing even more millions -- and much of that money

was paid for wasteful working practice and unjustified wage increases

insisted on by the unions.''

To Tory cheers, Mr Major taunted Mr Smith: ''That then was Labour's

idea of an industrial strategy. And it is clear from you it still is --

you have learned nothing.''

''That approach was tried in the 1960s -- it failed. It was tried in

the 1970s -- it failed.''