Last week, Bernd Pischetsrieder, BMW's executive chairman, said that the plant would be run down unless Rover agreed a streamlining and job-flexibility package to slash costs by £450m over the next three years.

Trade union officials were told to accept 2,400 redundancies and to cut costs or face the closure of Longbridge.

Reports, however, which emerged in the Sunday Times and The Observer that BMW was seeking up to £300m in government aid were quickly denied by Rover.

Rover keeps door open

"We (the company) have asked the government for nothing and we have made it clear that we have asked for nothing," said a Rover spokesman.

"But, it would make business sense for the company to accept grants if it is entitled to them," he added.

According to The Observer, BMW is poised to ask the government for at least £300m in aid to save the plant and its 14,000 workers.

Longbridge under threat

Rover has been severely threatened by mounting losses caused by poor productivity, old models and the strong pound.

The Observer said it had learned that BMW and Rover executives are preparing to request huge grants to regenerate Longbridge.

BMW is expected to ask the government for aid

Grants of up to 30% of planned investment are available to new overseas investors who are planning to build factories from scratch.

BMW is expected to argue that it should be entitled to similar help.

The newspaper quoted one senior source close to the group, who said: "If BMW decided to build an entirely new factory somewhere on a greenfield site in a UK region, it would get substantial subsidies.

"Is the government prepared to spend the same amount preserving 14,000 jobs as it would to create 3,000 jobs elsewhere."