Shanghai Automotive Industry Corporation, which lost out on the bidding for MG Rover, has announced it is considering a legal challenge to the decision to sell Rover to another Chinese state-owned company, Nanjing Automobile.

"We are considering all options including legal action," said a SAIC spokesman.

A spokesman for Shanghai Automotive said the company "has put in a superior offer, with better prospects for employment and British car production, and it has been denied the ability to have its final offer considered."

"We were very satisfied with the process and have nothing more to say," said a Nanjing spokeswoman.