The Phoenix Four, the former owners of MG Rover, are to accuse NM Rothschild - which advised Shanghai Automotive Industry Corporation (SAIC) in its aborted takeover of the car maker - of having an "uncomfortably close" relationship with the Government.
The directors of Phoenix Venture Holdings (PVH) will tell a committee of MPs investigating the collapse of the car maker to call senior executives from the merchant bank as witnesses, when hearings begin next month.
John Towers, chairman of PVH, has volunteered to appear before the Trade and Industry Select Committee, whose first witnesses appear next month. More hearings are due in June.
PVH directors - vilified for their role in the collapse of MG Rover- will also call for Treasury and Department of Trade and Industry officials to appear.
It is understood that hundreds of people, including journalists, have submitted evidence and offered to appear at the hearings, which will probe the Government's role in MG Rover's collapse.
Ministers and civil servants helped PVH negotiate with the state-owned SAIC before MG Rover went into administration last April. Days before that happened, the Government offered a £120m bridging loan to try to seal the deal, but SAIC turned it down as it would had to have been repaid, and the offer of the loan was withdrawn. After MG Rover went into administration, SAIC tried to buy some of its assets, but was outbid by Chinese rival Nanjing Automobile Corporation (NAC), which paid £53m.
PVH will ask the committee to find out Rothschilds' advice to SAIC when it refused to buy MG Rover, in effect pushing the car maker into administration.
Documents given to SAIC by Rothschilds show that the bank stressed its close relationship with the Government and that it could influence officials.
"Rothschilds has been dealing with businesses for the British government, especially providing services for enterprises owned by the British government and private companies frequently," say documents obtained and translated by The Independent on Sunday. "Therefore, we have close working relationships with many divisions of the Government."
Rothschilds named officials involved with MG Rover who it claimed to have influence over, including Geoffrey Norris, Tony Blair's policy adviser.
Sources close to Rothschilds rejected PVH's suggestion that it had a conflict of interest in its discussions with the Government. "Why would it be a problem for the Government and SAIC for us to have a close relationship to both?"
A DTI spokesman said: "We were dealing with Rothschilds, but they were not advising us."Reuse content