Nearly 400 jobs could be created in the Midlands as part of the plans to revive the famous Healey sports car name.
A deal has been agreed to build a modern version of the classic Austin Healey 3000, with sites around the company's Warwick home being considered. But the plan could threaten another maior deal with Nanjing at Longbridge.
Prototypes of the new Healey 3000 have already been tested and the car is likely to be unveiled later this year. It will be followed by a second model which is also likely to be based on one of its classic cars.
The comeback of one of the UK's most legendary sports cars after decades in the wilderness follows a deal for the Healey brand between its owners, Healey Automobile Consultants (HAC), and HFI, an Anglo-American consortium of engineers and investors.
HFI, which paid more than £1 million to Margot Healey, the widow of Healey cofounder Geoff, and their children Cecilia and Kate, said the Healey sports cars would be built in the UK.
Sites in the Midlands and in Wales are thought to be under consideration for the factory which is expected to follow a multimillion pound investment.
The development will provide a major boost to the struggling British car industry following the loss of thousands of jobs when MG Rover went under last year.
But it could cause problems for rival plans by GB Sports Car Company to revive the Austin Healey brand.
Last year, GB Sports signed a provisional agreement with Nanjing Automotive - the new Chinese owners of MG Rover and therefore the Austin name - to build Austin Healeys at Longbridge in Birmingham.
But Austin and Healey are separate legal entities and the deal between HAC and HFI gives HFI the rights to the Healey brand.
Margot Healey said: "We are delighted with this exciting new venture.
"We have been committed to protecting the brand and are very pleased to have reached an agreement which will result in the manufacture of a new Healey in the UK."
Tim Fenna, managing director of Bath-based HFI, said plans for the new Healey 3000 were at "an advanced stage".
"We look forward to seeing the great British sports car back on our roads soon," he said.
"We want the family to be involved, they are part of the heritage of the brand which is very important."
Mr Fenna said the firm was looking at the Midlands and South Wales as the site for a manufacturing site which could employ up to 400 people.
A test and engineering facility will also be established near Warwick.
He said: "The West Midlands is the home of the automotive manufacturing and there are lots of skilled people available.
"But in Wales there is a lot of regional assistance. We will be making a decision later this year."
Donald Healey, a pre-war rally driver and technical director of Triumph, set up the Donald Healey Motor Company in 1946.
In 1952 he went to the Earls Court Motor Show with his Healey 100 - so named because it could go faster than 100mph, an incredible achievement at the time.
At the show he struck a deal with Leonard Lord of the Austin Motor Company to build the car at Longbridge.