The Government is not to blame for the collapse of MG Rover, Trade and Industry Secretary Alan Johnson has insisted.
But Conservative Shadow Trade Secretary Alan Duncan claimed the company's fall was partly the fault of Stephen Byers, the former Labour Minister.
The House of Commons clash focused on the events of six years ago, when Phoenix Venture Holdings bought MG Rover from BMW for £10.
The Conservatives said the Phoenix consortium, led by John Towers, should never have been allowed to buy the Birmingham car manufacturer in the first place.
A rival bid by Alchemy Partners would have provided more compensation for staff made redundant, and had more chance of ensuring the long-term future of the company, said Mr Duncan.
He claimed the Government was partly responsible for the failure of the Phoenix managers to keep MG Rover afloat, because Mr Byers supported the bid when he was Trade and Industry Secretary.
Mr Duncan said "The Alchemy proposal would have paid many in the workforce up to £80,000 redundancy and given the company a good chance of long term survival as a niche manufacturer."
But Mr Johnson said: "I don't remember anybody from any side of this House being any other than congratulatory when the Phoenix company stepped in to rescue v olume production at Longbridge."
He said the Government had nothing to do with rival bidder Alchemy pulling out.
"Alchemy did not, could not, reach agreement with BMW. That's why there wasn't another option."
MG Rover was also being investigated by the National Audit Office, the Department of Trade and Industry, and the Commons Trade and Industry Committee, he said.
Mr Johnson was also quizzed by Northfield MP Richard Burden (Lab), whose constituency includes the former car-maker's plant in Longbridge.
He asked for assurances Government support for the West Midlands economy would continue when the Rover Task Force finishes its work in February.
The Task Force, which was created to co-ordinate the work of bodies such as job agencies and regeneration projects, was always designed as a "rapid reaction" group to last only ten months.
The Government is to continue providing funding to support the West Midlands for another two years, but Mr Burden said he was concerned there may not be a lead agency to co-ordinate the way the money was spent.
He said: "There are still a lot of people without jobs."
Mr Burden said the Task Force had helped cushion the effects of Rover's collapse on the Midlands economy and saved many jobs, but there were fears the area around the Longbridge factory could descend into poverty.
Mr Johnson said other bodies would carry on the work once the Rover Task Force is disbanded. ..SUPL: