MG Rover has played down reports that it is to sell up to China’s largest carmaker, but stopped short of an outright denial.

It has revealed it is in talks with a Shanghai firm on a ‘far reaching strategic relationship’. It was reported yesterday that Shanghai Automotive Industry Corporation was in talks to take over the firm.

A spokesman said: “To date, the company has not received an approach to acquire MG Rover or an equity stake.”

Rover unveiled a strategic co-operation agreement with SAIC in June to fund the development of new models. It is reluctant to reveal further details before the Chinese government signs off on the deal, possibly by the end of the year.