RESCUE talks over the future of MG Rover with its potential Chinese partner resumed yesterday, only a day after the Department of Trade and Industry said that negotiations had stalled.

The move has raised hopes that a deal may be concluded and that the DTI will shortly formalise its offer of £100 million to support the business until a joint venture is agreed.

MG Rover, which employs 6,100 directly and supports about another 12,000 jobs in the West Midlands, insisted that both it and Shanghai Automotive Industry Corporation (SAIC) were working to reach a deal on a joint venture that would see the British company effectively taken over by the Chinese. The talks had faltered over fears about MG Rover’s solvency. A DTI source this week said that the finances were worse than the Government or SAIC had thought.

In Shanghai, John Towers, MG Rover’s chairman, emphasised “the continued commitment from ourselves, and from SAIC, for a successful outcome to our joint venture”. After calls from the DTI that he and the other directors put in about £5 million to the loan, he said: “We have been providing every assistance, including very extensive personal commitments.”

It had been thought that the DTI could lay out a formal offer of about £100 million in a bridging loan yesterday to aid the process but its decision could now come today or tomorrow. The loan may not guarantee that the deal goes ahead but observers believe that the DTI would not formally offer the money if was unlikely to make any difference to SAIC’s decision.

• Union leaders lobbied Jacqui Smith, the Industry Minister, over the future of Peugeot’s Ryton plant near Coventry. The carmaker is ending the third shift and shedding 800 staff.

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