MG Rover's new Chinese owner has joined forces with one of the failed bidders for the carmaker to develop the next generation of MG sports cars at Longbridge.

The likelihood of the Birmingham factory being used by Nanjing Automobile has strengthened after its link up with Fraser Welford-Winton, former head of the Powertrain engine making division.

Mr Welford-Winton's firm, the GB Sports Car Company, has reached an agreement to collaborate with Nanjing on the next phase of its development.

There had been doubts about Longbridge being used by Nanjing, with the Chinese firm declining to firmly commit to the 330-acre site.

But the new link could see MGs rolling off the production line in the next 12 months and a new MG roadster, possibly a revival of the MG Midget, in the next two years.

It would also see between 1,000 and 2,000 new jobs being created.

In conjunction with Nanjing's established advisers, Arup Group and China Ventures, Mr Welford-Winton's team will work on the development of a range of MG automobiles to be designed and developed for manufacture at Longbridge.

Other activities will include the consolidation of the site for automobile manufacturing and related activities in conjunction with the site's landlord St Modwen.

A spokesman for the GB Sports Car Company said a high powered team was in place to revive MG production.

He said: "We had a team in place originally two-andahalf months ago to buy the MG TF and the assets, and had the required investment behind us.

"But that was overtaken by events when the administrators wanted to sell the whole business as one.

"When Nanjing bought MG Rover they were looking for a UK partner to work with, and we decided our team could become that partner. We are at the first stage, but Arup will work on the research and development and hopefully we can establish the detail behind the deal and build MG cars."

The plan will see MG TF's and MG ZTs built at first, with production ultimately rising to around 60,000 to 70,000 vehicles per year.

The spokesman said: "It will take up to 12 months before the site starts producing cars again.

"The assets at Longbridge are an excellent, a first class paint shop and the unused Mini assembly hall. These justify the investment and continuation of work at Longbridge.

"The site needs to be remapped, and work begun with St Modwen to remodel it, but we believe we can do it.

"We have the knowledge and experience of running Longbridge. This is a plan which we can make happen."

Mr Welford-Winton said: "I am delighted I will be at the heart of the development and implementation of a business plan that will produce long-term skilled jobs at Longbridge and create a centre of excellence for sports car activities for which the UK is world renowned."