LONDON (Guardian) -- The trade and industry secretary, Alan Johnson, denied yesterday that the government had adopted a "laissez-faire" approach to British manufacturing industry.

Pointing to a record of support for manufacturers, Johnson rejected criticism that events such as the planned closure by PSA Peugeot-Citroën of its factory at Ryton, with the loss of 2,300 jobs, showed the government had "washed its hands of manufacturing industry".

The decision to shut the west Midlands plant came a year after the collapse of MG Rover and just ahead of the announcement that the sportscar maker TVR is to switch production from its Blackpool plant, where more than 200 people work.

Johnson said that when large factories were in jeopardy, the government and related agencies were often "the first to arrive and the last to leave".

"Our belief in dynamic markets does not mean an inactive or laissez-faire approach to industry," he told an audience in the north-east.

The government had invested £170m in the Nissan plant in Sunderland, provided more than £1bn in launch aid for Airbus and had offered £14.4m to PSA Peugeot-Citroën to persuade the carmaker to build the Peugeot 207 at Ryton.

"The final myth I want to scotch is that Peugeot's demise was another nail in the coffin of manufacturing industry. It wasn't a nail and there isn't a coffin."