Nanjing Automobile has six months to raise the money to restart car production at Longbridge - or it could pull out from the long term lease it will sign today.

The prospect of car production eventually resuming at Longbridge will edge closer with the 33-year deal for a third of the former MG Rover site.

Nanjing, which bought the assets of MG Rover for £53 million last July, has completed negotiations with St Modwen to occupy 105 acres.

It will cost £2 million a year - reduced from the £5 million paid by former tenant Phoenix Venture Holdings.

But while Nanjing has committed itself to a long term lease, a break of six months has been inserted which could terminate the agreement.

Doubts had clouded any optimism that a contract could be clinched, with fears circulating around Nanjing's ability to raise the estimated £100 million to restart work.

But Nanjing insisted it would be able to see through its plans to manufacture MG- badged versions of the Rover 75 - the ZT - and the MG TF two seater sports car.

Production is due to begin sometime in 2007, with eventual levels expected to reach 100,000 models a year.

While several figures have been floated about the final employment total, it is now thought to generate up to 1,000 jobs.

A spokesman for St Modwen said: "A long term lease will be signed, which will have a break in it after six months in which Nanjing expects to secure the funding.

"But after that they could walk away."

Coun Mike Whitby, leader of Birmingham council, said: "With this lease Nanjing has made a commitment to resuming manufacturing.

"It is set up in the heart of Birmingham, a 105-acre site which will used for car production and assembly. "

Coun Whitby (Con Har-borne), who has helped facilitate the talks between St Modwen and Nanjing, said he was confident the venture would prove a success.

He said: "The MG marque is powerful and has a following in Britain, Europe and America, and is getting a following in China as well.

"We have worked tirelessly to make this happen. I have been determined to bring about a resumption of car production, and to do this we have developed a relationship of trust and confidence which are essential pre requisites to any deal."

Coun Whitby said the council had given Nanjing advice on planning law and regeneration as it sought to close a deal.

"Until today, anything could have happened.You do not sign a commitment to a 33-year lease for 105 acres of land if you are not determined to be successful.

"We must be cautiously optimistic that this relation-ship will bear fruit."

Clive Dutton, director of development at the council, said: "This is a critical step in their business plan. But everything Nanjing has said they have met."

St Modwen will reveal further details of its development plans for the site at the signing ceremony which will be attended by its chief executive Bill Oliver and Nanjing vice president Wang Hongbiao.

The Birmingham-based developer acquired the Longbridge site in two chunks in 2003 and 2004 for £57.5 million in a sale and lease back deal with MG Rover. Besides the 105 acres that will be let to Nanjing, 180 acres have been earmarked for a mixed use development which could ultimately create 10,000 jobs.