The Shanghai Automotive Industry Corporation (SAIC), the company at the centre of failed plans to rescue MG Rover, is on the brink of building Rover cars in China.

The company plans to start production of the Rover 25 and 75 models as soon as it has completed a deal with BMW to use the Rover name, according to reports from the BBC.

Officially SAIC says that no decision on the production of Rovers in China has been made, but the BBC says sources close to the Shanghai-based company have indicated that the plan is likely to proceed.

SAIC bought the intellectual property rights to the Rover 25 and 75 models - in effect, the designs and engines - during lengthy negotiations with MG Rover last year.

SAIC are believed to have approached to the administrators of MG Rover about the possibility of buying equipment from the Longbridge production lines.

Meanwhile, John Towers, the head of the consortium that bought MG Rover for £10 in 2000, has claimed that he had been just 20 minutes from closing a deal with SAIC that would have saved the carmaker from collapse.

The head of Phoenix Venture Holdings, who was given a hero's welcome at Rover's flagship Longbridge plant five years ago, was confronted on BBC Radio WM by angry former employees who said they faced "unbelievable hardship" because of the crisis.

According to Mr Towers, the Trade and Industry Secretary Patricia Hewitt and Transport and General Workers Union leader Tony Woodley had been preparing to travel to the Longbridge plant in Birmingham on April 5 to announce a partnership with the SAIC.

But "completely out of the blue", SAIC’s advisers contacted the Department of Trade and Industry with the message that the Chinese firm was unlikely to proceed with the deal.

"We were entirely shocked," said Mr Towers, adding that the new position gave the DTI a "massive problem" over a proposed £100 million loan to MG Rover.

"We were 20 minutes away from doing a deal," he said.

There had been a team of 125 employees working on the proposed partnership in Shanghai, including 65 from Longbridge who were now returning from China, Mr Towers said.

The government has ordered an independent inquiry into the finances of MG Rover, which collapsed last week with the loss of 5,000 jobs.

Calls for an investigation emerged amid allegations of a financial "black hole" in Rover's accounts. Mr Tower has rejected the allegations, accusing experts of misreading Rover's figures and omitting the value of stock and other items.

As Mr Towers was talking, administrators were called in to eight European subsidiaries of the MG Rover Group.

Responding to bitter Rover employees, Mr Tower also said reports of his salary had been "widely exaggerated" and claimed there was a "slim hope" that some form of car production could be rescued at the company’s Longbridge factory.

According to reports, Mr Tower and four fellow directors had profited by around £40 million from Rover since they takeover of the group from BMW.

One worker e-mailed the radio programme asking Mr Towers how he could "square" his pay with the fact that employees would be walking away with just a few thousand pounds at most.

Mr Towers said he and his fellow directors were paid £30,000 a year when MG Rover was bought from BMW five years ago, and the figure then rose to £36,000.

Mr Towers told another caller he had bought his £85,000 MG sports car so did not owe any money.

The "widely exaggerated" earnings were paid by MG Rover’s owners Phoenix Venture Holdings as a result of activities that had nothing to do with Rover, Mr Towers maintained.

Mr Towers told one caller there was a £49 million deficit in the pension fund, but a deficit recovery plan had been worked out before the firm collapsed.

He held out hopes that workers would be paid their pension benefit and would not lose out over loans taken out to pay for MG Rover cars.

Some callers revealed that workers employed by Phoenix Venture Holdings (PVH) rather than MG Rover could not claim redundancy or benefits or look for other work because PVH was not in administration.

Mr Towers admitted there were around 80 workers caught up in the "mess" which was "completely unacceptable".

He said he was determined to be active "in the background" and was spending 16 hours a day at Longbridge supporting the administrators and looking at how the partnership deal could be restructured.

There had been an expression of interest on Friday in buying the Powertrain engine business which was being assessed.

"There is hope we can get back into significant production. The future is bleak, but I still firmly believe that we have the possibility that we could get car-making back at Longbridge."

A deal with the Chinese "could still come good", insisted Mr Towers, adding: "It is not dead."

He went on: "That is the best possible outcome that could happen. It would lead to a significant number of jobs at Longbridge."

He offered to meet one caller, Gemma Cartwright, who helped to organise a protest in Downing Street a week ago today, after she told him that the workers’ pain over the collapse of Rover was "horrendous".

He maintained the company had taken notice of the views of workers over the years.

Mr Towers’ optimism over future car production is not shared by union officials, who do not believe it is realistic to raise hopes for Longbridge’s future.

Meanwhile, PricewaterhouseCoopers announced it had been appointed administrators to eight European subsidiaries of MG Rover in Germany, Holland, Spain, Italy, Portugal, France and Ireland.

Joint administrator Tony Lomas said: "Our appointments as administrators to all of the national sales companies across Europe should enable us to handle local customer and dealer issues in a more constructive manner.

"Additionally, it will ensure the supply of lefthand-drive vehicles to the market is carried out in a controlled way for the benefit of all concerned."

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