TORONTO - A special auto industry adviser to Prime Minister Stephen Harper has resigned after less than three weeks on the job.

But a provincial official said Monday that Jim Arnett will continue to advise Premier Dalton McGuinty on restructuring the auto industry.

"The federal government decided to rely more on internal advice, so Arnett decided to remove himself from his position with Ottawa," the official explained.

"Arnett will stay on as an adviser to Ontario as we think his advice and expertise remain valuable."

The development suggests Canada is unlikely to follow U.S. president-elect Barack Obama's lead and appoint a "car czar" to oversee the companies.

The move came on the eve of Saturday's announcement that Ottawa and Queen's Park are lending $4 billion to General Motors Canada and Chrysler Canada.

The provincial official said Arnett was "supportive" of Saturday's announcement, which he helped develop.

When his joint appointment was announced on Dec. 1, federal officials said Arnett would play a "significant" role in getting the U.S.-based automakers back on track.

Arnett, former CEO of Molson Inc. and one of Canada's leading experts on restructuring troubled companies, was the premier's special adviser on the steel industry from 2004 to 2006.

In that capacity, he helped to restructure Hamilton-based Stelco Inc., saving the firm and helping McGuinty's Liberal government politically.

Arnett was not immediately available for comment.