The government has approved a plan to build the iconic British brands in China. But expect a showdown between the two Chinese car-makers who bought into the failed MG Rover Group.

If you thought you’d seen the last of MG Rover – and, for that matter, Austin cars – think again. Nanjing Automobile Corporation, owner of the collapsed British car-maker has been given the green light to relaunch the brands in China.

The news comes weeks after Nanjing Auto signed a 33-year lease on the former MG Rover Group’s Longbridge plant in Birmingham, where it plans to employ 1000 workers to revive the MG TF.

China’s highest government planning body, the National Development and Reform Commission today approved Nanjing Auto’s plan to build MGs, Rovers and Austins in China.

According to The Shanghai Daily, Nanjing Auto’s plan – dubbed Project 566 – was submitted to the government only on Friday, last week.

The newspaper says Nanjing Automobile Corp will use the Rover 75 (pictured) to spearhead its revival plans to build 200,000 cars, 250,000 engines and 100,000 gearboxes a year.

Last July, Nanjing bought the MG and Austin brands from the bankrupt MG Rover Group for 50 million pounds ($A118 million). The deal included complete assembly lines and research and development equipment.

The Shanghai Daily says Nanjing Auto will build a major manufacturing plant and research and development centre in – where else? – Nanjing, capital of Jiangsu Province. Chairman of Nanjing Auto, **** Haoliang told the 'paper he expected cars would start coming off the production line early in 2007.

If you've been following the MG Rover story since the iconic British brands went under last year, perhaps won't be surprised to hear that there’s more to the story than meets the eye. As The Shanghai Daily also reports, Nanjing Auto’s now on a collision course with Shanghai Automobile Industry Corp, which paid 67 million pounds ($A158.2 million) for the designs and intellectual property rights of the Rover 75, Rover 25 and their engines.

Stay tuned …