The president of China's Shanghai Automotive Industry Corporation is due in Britain this week as his company's battle over MG Rover with its fellow Chinese state-owned carmaker, Nanjing Automobile Corp, heads for a climax.

SAIC's financial advisers held talks over the weekend with a consortium of Birmingham businessmen, headed by the corporate troubleshooter David James, over a possible joint bid for MG Rover assets.

The aim was to see if a deal could be struck under which Mr James's consortium would buy the MG TF sports car operation, which is regarded as the jewel in the MG Rover crown. SAIC would then take Powertrain, the engine and transmission maker, and would supply engines for the 2-seater TF. SAIC has already tabled an offer for the engine and transmission business .

The advantage of a joint bid, which could be worth in the region of £60m, would be that it would allow the receivers, PricewaterhouseCoopers, to sell more of the business to a single buyer.

However, sources close to the situation said last night that the discussions with Mr James had so far failed to produce a deal and that no further discussions were planned. SAIC declined to comment.

SAIC has also held talks with motor industry executives Martin Leach, formerly with Ford of Europe, and former Vauxhall executive Ed Sabisky. They are keen to revive a scaled-down version of the original MG Rover/SAIC joint venture proposal - the failure of which precipitated Rover's collapse in April this year.

Their proposal, which has the backing of Tony Woodley, general secretary of the Transport & General Workers Union, would involve significant production at Longbridge, but is likely to involve greater SAIC investment than envisaged in a deal with Mr James.

The arrival of SAIC's president Chen Hong is likely to prompt speculation that he is coming to Britain to clinch a deal. Industry sources insisted that the visit had been planned for some time and was not significant.

Nanjing Automobile is being advised by Nick Stephenson, one of the Phoenix Four group of Midlands businessmen who bought MG Rover from BMW for £10 five years ago.

Nanjing is understood to be interested in the production of a range of MG Rover cars. It is unclear whether it would be based at Longbridge or production lines shipped to China.

Ironically, Nanjing was the junior partner in the abortive joint venture talks between SAIC and MG Rover, which would have seen Rover models produced in Britain and China.

The venture would have in volved the two companies working together to develop new models. But as the scale of MG Rover's financial problems became apparent the talks collapsed and Rover was pushed into administration.

It is also unclear how Nanjing would approach the ownership of the intellectual property rights to MG Rover models, which SAIC bought from MG Rover for £67m before its collapse.

A deal between the James-led consortium and SAIC would have a number of advantages. It would overcome the issue of intellectual property rights and if it included a provision for SAIC to supply engines for the MG TF it would be more likely SAIC would continue to manufacture at Longbridge.

If SAIC persuaded PwC to allow it to buy the engine maker but lacked a UK partner, it would be more likely to shift production to China. Yesterday PwC said it was considering the bids which had been made.

David James, 67, has a long track record of working with financially challenging projects. He was drafted in to run the Millennium Dome in September 2000, when it was technically bankrupt, and was hired by the government to review the bidding process for the construction of the new Wembley stadium.