The Polish authorities have agreed to allow the Birmingham-based company to invest the cash in a former Daewoo plant near Warsaw.

The opportunity arose after the South Korean car firm went into administration last year, owing millions of pounds around the world, including to the Polish government.

MG Rover would make cars and engines in the country.

Chinese deal

It would not be the first time MG Rover has looked abroad to strengthen its position in the market.

The company struck a deal in March last year to develop a new range of medium-sized cars in China.

And in December last year, the firm announced it was to go in to partnership with the Indian firm Tata Engineering to make a new small car.

MG Rover is due to make a final decision about investing in the project by the end of Friday.