A return of the famous Austin Healey sports car has moved closer after a deal was signed between the company aiming to revive it and the Chinese owners of MG.
Nanjing Automobile Corporation (NAC) has reached an agreement with Healey Automobile Consultants and HFI Automotive to collaborate on the future development of the Healey and Austin Healey brands and sports cars bearing their name.
The deal opens the way for the development of a modern version of the classic Austin Healey 3000 - as well as joint working on the next generation of MG sports cars.
Nanjing, which acquired the Austin Healey brand when it bought MG in 2005, could have prevented the name being used by another group.
But now the two companies will share design and engineering expertise, as well as reduce costs through joint sourcing of components.
The collaboration could bear fruit with a new Austin Healey and a successor to the MG TF.
HFI, an English-American consortium headed by Tim Fenna, who owns Frontline Spridget - a spares and modification firm for original Austin Healeys - has already produced a prototype model of the Healey 3000.
No venue for production has been decided, although some could take place on the part of Longbridge occupied by NAC, where the Healey 3000 was built during the 1960s.
But the deal will not see Healey versions of the existing MG TF sports car, which Nanjing is due to launch in the UK this autumn.
A spokeswoman for NAC, said: "The idea is to work together on a reciprocal basis on whatever projects we see fit.
"It means we get the opportunity to work with Healey and they can work with us. There has been some confusion over the intellectual property rights to the Austin Healey name in the past.
"This irons out the cooperation for us to work on future projects."
The spokeswoman said it was too early to say when the first results of the partnership would appear, but said any production would create more jobs.
Nanjing said in a statement that the deal ends long-standing issues about ownership of the brands and trade marks and expands opportunities for joint trade between the companies.
HFI is an Anglo-American consortium of engineers and investors which is the automotive partner of HAC, which owns the Healey brand.
It paid more than £1 million to Margot Healey, the widow of Healey co-founder Geoff, and their children Cecilia and Kate to use the name.
The new two-seat sports model designed by HFI has a front three-litre engine and is described as a modern interpretation of the classic Healey range.
It could be followed by a second model which is also likely to be based on one of its classic Healey cars which ceased production in 1972, although Healey's name lived on with the Jensen-Healey.
Mell Ward, secretary of the Midland branch of the Austin Healey club gave a cautious welcome to the developments.
She said: "Lots of different people have tried to bring back Healey over the years, but HFI seems to have the money and may do it.
"I would welcome the return of Austin Healey if they were the same cars as before. I wouldn't like it if they were souped-up sports cars or a rebranded version of the TF.
"They would have to be have to be like the authentic Healeys used to be.
"There is a lot of affection for Healeys still, and depending on the cost there could be a lot of pent up demand.
"You still see a lot of them out on the roads, and there will be new owners who want to buy a new one."