The consortium led by the former Rover chief executive John Towers submitted its bid for the car maker last night, promising to retain volume car production and thousands of jobs at Longbridge and Cowley.
John Hemming, the West Midlands computer millionaire who is part of the group, said the offer was "concrete and serious" and offered the best hope of salvaging jobs.
Among companies backing Mr Towers is the automotive engineering and components group Mayflower, which is a major supplier to Rover. The consortium, under the name Project Phoenix, is also backed by a West Midlands car dealer, John Edwards, and unnamed financial institutions.
BMW, which agreed last month to sell Rover to the venture capital group Alchemy, earlier confirmed that it had received the offer and would study it. "We would like to look at it so we can judge it fairly," said a spokesman. "We are not going to say whether it has substance, but we are assuming it is a serious bid."
Mr Towers, who quit Rover a year after it was taken over by BMW in 1994, is proposing to retain production of the Mini and Rover 75 and build a new medium-sized car, the R30, at Longbridge. The plan would safeguard all but 1,500 of the 9,000 jobs at Longbridge and thousands more in the local components industry.
In contrast, Alchemy's proposals, which envisage producing about 40,000 MG-badged cars at Longbridge, are likely to lead to 5,000 job losses initially and thousands more among suppliers.
Stephen Byers, the Secretary of State for Trade and Industry, gave the Towers bid a ringing endorsement on a visit to the Midlands yesterday.
Speaking on BBC Radio WM, Mr Byers said: "The Towers plan offers a better prospect than perhaps anything else. He has got some exciting ideas, which I think are worthy of consideration.
"In the conversations I have had with John Towers he has said to me very clearly that one of the reasons he wants to give it a go is because he knows the commitment of the workforce at Longbridge. He knows the skills and the dedication that you have given to that plant over the years, and he believes that by working together with the workforce there is a real chance of a far better prospect for the future than is being offered by Alchemy."
However, motor industry analysts believe Mr Towers faces an uphill struggle. Senior government officials concede they are "very cautious" about his chances of succeeding.
Professor Garel Rhys, director for the Centre for Automotive Industry Research at the Cardiff University Business School, said: "There are huge risks involved in this bid. One hopes that the Towers scheme will be accepted by BMW, but my instinct suggests that the rival bid from Alchemy Partners will succeed. The Towers bid is a pretty long shot, and I think John Towers is doing it out of a sense of duty and with a great deal of hope."
The R30 project alone is likely to need investment of more than £800m. Alchemy doubts that Mr Towers can raise this sort of finance given Rover's record and competition from the likes of huge car makers such as Ford, General Motors, Volkswagen and Toyota.Reuse content