The future of Britain's last major carmaker was hanging in the balance today as MG Rover and a potential Chinese partner waited to see whether the British government would grant a loan crucial to a deal going ahead.
"We are still waiting to hear from the DTI (Britain's Department of Trade and Industry) ... The ball is in their court," an industry source said.
The government is expected to announce soon whether it will go ahead with a proposed £100 million loan which is crucial to a planned joint venture between MG Rover and China's Shanghai Automotive Corp (SAIC).
British Prime Minister Tony Blair told parliament his government would do whatever it could to secure a deal and protect the 6,000 jobs of MG Rover workers. "We keep in close touch on this issue, we will do whatever we can to help get a successful resolution of it," Mr Blair said.
A former British icon dating back to 1905, MG Rover has been in decline for years as rivals muscled into its market. Germany's BMW bought the business in the 1990s, but failed to turn it around and sold it back into British hands for just £10 in 2000.
Negotiations between DTI officials and SAIC continued late into the night in Shanghai with no breakthrough. There were no formal talks scheduled for today. Another source close to the talks said the deal would collapse without the DTI loan. However, it may still fall through even with the loan.
MG Rover's future and 6,000 jobs at its Longbridge plant in central England hinge on securing the alliance with SAIC to produce cars in Britain and China.
MG Rover recorded a 2003 pre tax loss of £77 million. The collapse of MG Rover would be another blow to Britain's car-making industry. Ford, which owns luxury brand Jaguar, cut jobs and scaled back production in England last year.
The company is the last major British-owned carmakers in the country. Carmaking is still a major industry in Britain but most are owned by foreign firms. No one at the DTI was immediately available for comment.