According to a report in today's Times, the company is looking at an alliance that could lead to a significant increase in production and the creation of up to 1000 jobs.
Media rumours suggest that the potential investor currently being wooed is not another carmaker but a 'large business with an interest in the car industry' - possibly a leasing company.
The deal could help to stem a substantial fall in sales across Europe, particularly if the carmaker can exploit regions in which it is currently weak.
The increase in production would involve existing Rover and MG models, as well as the carmaker's new mid-sized car, due to be launched next year.
It is thought that the company is particularly keen to expand in Eastern Europe and the US. The group has been attempting to take over a plant in Poland formerly owned by Daewoo.