MG Rover is investigating a 'family and friends' offer being made by Banbury Rover in Oxon, which is advertising discounts of up to 24.1% on new models.

Ben Sage, sales manager at Banbury Rover, said the employee discount had been extended to all 'relatives' – including step relatives and even friends – until the end of the month.

Mr Sage claimed that he was able to offer discounts ranging from 16% to 24.1% on selected models including the 75. MG Rover employees could use their discounted purchase for “family and friends”, he said.

MG Rover spokesman Kevin Jones said the offer was unacceptable. The employee discount covers immediate family from grandparents to children and is strictly controlled. Forms to buy discounted cars could only be issued through MG Rover's personnel department.

“This is an internal matter which we are looking into,” said Mr Jones. MG Rover's normal discount was 7%, rising to 10% on some models, with only the automatic 'stepspeed' MGF carrying a 24% discount, he added.