MG Rover, without the obsolete Mini or Metro-based 100 as an entry model, has forced the 25 down to £7,995 for a 3dr 1.1-litre version. It is also available in E-level trim, and as a 5dr (a £500 premium).

Equipment includes driver airbag, power steering and alarm. The £8,585 1.1iE adds electric sunroof, central locking and driver height/lumbar seat adjustment.

MG Rover, stretching its models down for budget buyers, is also extending them upwards to attract customers wanting performance derivatives.

It has launched a motorsport division to try to highlight its sporting credentials ahead of the launch of the MG-branded 25, 45 and 75 models later this year.

MG Sport & Racing managing director Rob Oldaker said: “We sum up the brand essence of MG in the phrase 'outrageous fun for all'. To our way of thinking, outrageous fun is a serious business. So we have set up a serious business to generate that fun.”

He said engineering programmes for motorsport cars would will filter down to the road-going models and generate sales of performance parts and related mechanise.