MG Rover remains in talks with China Brilliance about jointly developing and manufacturing new cars in the UK and China.

The collaboration with the £1.7bn turnover company could also include a combined research and development centre, a joint engine strategy and a common component supplier base.

An MG Rover spokesman said: “China Brilliance would be an ideal partner – it has all the necessary resources. Another factor is that China is an emerging market, which is exciting for our products.”

Meanwhile, MG Rover is facing possible industrial action after workers at its Longbridge plant rejected an improved wage package, which included a 2.5% pay increase and changes to the unpopular flexible working time system.

Unions are presently balloting the workforce, but MG Rover is confident that both sides would reach a sensible solution.