Morgan says it will offer a full refund to all 50 'Partner' investors who each invested £1000 in the Worcestershire-based firm's 2003 Le Mans race bid.

The move follows the decision this week by the race organisers to reject the company's application – a decision which a Morgan company spokesman says was “disappointing and mystifying.

“Its only fair that we offer them the option of having their money back, or alternatively or put it forward for the revised rally programme.

A further 100 individual sponsors – mostly members of the general public – have also expressed an interest in the Partners scheme, and they will be approached by the company to see whether, or how, they want to take their application forward.

“Naturally, we are disappointed at the decision by the Automobile Club d'l'Ouest (ACO) decision – we were confident that we had done enough at the race last year.”

He said the company's failure to take part at Sebring may have been a factor in the ACO decision – but the Club has not given a reason.

“We feel very sorry for our supporters, but I know they would wish us to carry on in true Morgan spirit – and we flatly refuse to give up.”

One race insider has today questioned the ACO decision to reject both Morgan and MG Lola's entries – when there will be a question mark over the attendance of a number of entries.

“There are 14 US teams on the starting line. If the international situation doesn't stabilise by then, how many of these teams are going to be prepared to travel all the way to France to compete in this race?”