Nanjing Auto, the Chinese firm which bought MG Rover last year, has signed a 33-year lease to stay at the Longbridge plant in Birmingham.

The Chinese group has said it is now planning to resume production of the MG TF sports car there in 2007. However, if the Chinese manufacturer cannot find sufficient funding for its plans, it can pull out of the deal within six-months.

The deal was made with the site’s owner, St Modwen Properties.

"This means we can move forward with our business plan to build cars at Longbridge," said Nanjing’s UK chairman, Wang Hongbiao.

The lease means Nanjing will pay approximately £1.8m a year for the South Works section of MG Rover's former Longbridge premises.

The 105-acre area, which includes two car assembly plants, a paint shop and offices, accounts for about a quarter of the old site.