Unions at MG Rover have beaten off plans to outsource parts of the engine and gearbox business by "tendering" to do the work themselves, it emerged yesterday.

The unions, including the TGWU and Amicus, offered substantial savings through greater efficiency, flexibility and productivity that persuaded MG Rover to drop its proposal to hand the work to an outside company.

Powertrain, which employs 1,300 and sells a fifth of its annual output of engines and gearboxes to other car manufacturers, originally planned to outsource materials handling at the Longbridge plant.

Fearing about 70 jobs could be lost in the change, the unions said they would meet the company's requirements. "It was a surprise move but we had a formal review and took the proposal on board. We will not outsource the work but have won significant breakthroughs," Powertrain officials said.

Tony Woodley, TGWU deputy leader, said the agreement was not without dangers as the drive to outsource operations could re-emerge. "But I've no doubt that we are trying to maintain as many jobs in that company as we can when sales are falling."

Last month Rover sales in Britain fell to 5,760, or 3.13% of a booming market, compared with 8,513 a year earlier.