THE agreement between the Government and BMW on a £180 million rescue package for Longbridge secures the future of the plant for at least 30 years and triggers a chain of events that will lead to the transformation of the Rover range. The announcement of cash aid was made by Prime Minister Tony Blair during question time in the House of Commons and came barely 12 hours after BMW chairman Professor Joachim Milberg warned that the longer negotiations dragged on the more likely BMW was to move car production to Hungary.

But BMW made it clear in a joint statement with the Department of Trade and Industry that the subsidy meant the replacements for the Rover 200 and 400 would definitely be built at Longbridge. However, the deal, which will also see BMW investing £1.7 billion to transform the Longbridge factory, must be ratified by BMW's board next week.

Blair told the House: 'I am delighted that we can now look forward to BMW making Longbridge a world-class plant for the next century and one that will achieve the highest standards of productivity and working practices.'

A joint statement by BMW and Trade and Industry Secretary Stephen Byers said: 'We are pleased to announce that we have reached agreement in principle on the size and nature of a Government aid package which will secure production of the new medium car at Longbridge. Such an agreement is still dependent upon BMW board approval and when formal agreement is reached between the Government and BMW this package will require approval from the appropriate EU authorities. This news is a massive boost for both the Rover Group and the West Midlands industrial base as a whole.