Talks which aim to rescue MG Rover have stalled, it emerged yesterday.

The Department of Trade and Industry said discussions between its officials, who flew to China last week to broker a joint-venture deal with Shanghai Automotive Industry Corporation (SAIC), had failed to find an agreement.

A DTI source said: "MG Rover's finances are worse than either SAIC or we had thought. There still remains a question mark over its solvency even if the deal is done."