Under the terms of their rescue plan, James and his consortium wanted to break up Rover and create a new MG car firm.
Under the plan, SAIC would have acquired Rover's Powertrain engine-making division, and bought the firm's remaining assets a year later.
For that to happen, James needed China's Shanghai Automotive (SAIC) to agree to buy key Rover businesses and assets, which it refused to do.
Without SAIC's agreement, James and his group could not raise the money that they needed to buy Rover.
James said that over the weekend it became clear that SAIC was not willing to commit to the plan. "I thought they would accept it, because it would be such a logical step," he told the BBC's Today programme.
"We would have put them on our board and given them 25% of our new MG company as a gift," he explained.
"It would have been a very logical progression towards an eventual time when SAIC would have owned everything."
He said that it would have given SAIC access to the UK car market as well as providing the Chinese firm with the assets they already had expressed an interest in.
The Mail on Sunday carried news of James' talks, while The Sunday Telegraph reported that another firm, Nanjing Automobile, had been awarded preferred bidder status, enabling it to conduct negotiations on an exclusive basis.
Rovers' administrators PricewaterhouseCoopers have set an October deadline for reaching a deal.
James said his deal could only be resurrected if PwC made it clear it would not accept bids from SAIC or Nanjing for parts of MG Rover, or if the Government promised to step in as a guarantor for James's proposed deals.