Former Trade and Industry Secretary Stephen Byers is to be questioned at a House of Commons inquiry over the sale of MG Rover to the Phoenix consortium, and the carmaker's subsequent collapse.

A long-awaited investigation into the fate of MG Rover is to look back further than expected and examine BMW's sale of Rover to the Phoenix Four for £10 in 2000.

It will investigate the role played by Mr Byers during the controversial sale, when the Government helped to convince BMW to sell the car manufacturer to Phoenix Venture Holdings instead of rival bidders Alchemy Partners.

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It will also examine the role played by Patricia Hewitt, another former Trade and Industry Secretary, as MG Rover tried to negotiate a deal with Shanghai Automotive last year.

A joint-venture partnership with the Chinese firm could have saved MG Rover, but when this fell through it led to the carmaker's collapse, and the end of production at Longbridge.

The Commons Trade and Industry Select Committee, chaired by Peter Luff (Con Mid Worcestershire) announced the inquiry yesterday.

Other members include Julie Kirkbride (Con Bromsgrove) and Rob Marris (Lab Wolverhampton South West).

A separate DTI investigation is already under way and is looking at the way the company was run.

The Commons inquiry will focus on the role of the Government and whether Ministers should have done more to save Rover or whether they intervened too much.

It will also look at the support the West Midlands economy has received since the company went into receivership.

Mr Byers and Ms Hewitt are both expected to be called to give evidence.

Alchemy emerged as the front-runners to buy Rover when BMW announced it was selling the company in March 2000.

It planned to develop the MG marque, turning Rover into a prestige niche car maker and drastically reducing the Longbridge workforce.

But unions were fiercely opposed, and support grew in the region for a rival bid from the Phoenix consortium, led by John Towers.

Mr Byers helped arrange talks between Phoenix and BMW which led to a deal being signed.

On the day the agreement was signed he said: "When I got the Towers Consortium together with BMW and facilitated their first meeting, I was criticised in many quarters for getting involved in that way. I think we were right then and I think today we are seeing the results of that."