Prime Minister Tony Blair welcomed the announcement on Tuesday and gave special praise to Trade and Industry Secretary Stephen Byers for his role in the deal.

Mr Blair was speaking after it was announced the consortium headed by former Rover boss John Towers had bought the car group for �10 in a deal which could save thousands of UK jobs.

Today belongs to John Towers, the Phoenix consortium, the workers at Longbridge and the people of the West Midland

Stephen Byers

"Today there is good news and I congratulate all involved and I hope people will recognise the important contribution of Steve Byers who, despite all the attacks on him, rolled up his sleeves, got to work and, behind the scenes, ensured the government did what it could to bring this about," said the prime minister.

"Now there is still going to be a lot of difficult going over the next few months and years, but at least it is a real start to the process of giving Longbridge a decent future."

Mr Byers told the Commons the deal to continue volume car production at Longbridge was good news for the whole of the West Midlands.

He praised Mr Towers who had been "determined and dogged in the face of criticism".

It is a real start to the process of giving Longbridge a decent future

Tony Blair

"Today belongs to John Towers, the Phoenix consortium, the workers at Longbridge and the people of the West Midlands," said Mr Byers.

"Through adversity they have all demonstrated great strengths and we look forward to working with them to meet the challenges that lie ahead."

Mr Byers acknowledged there would still be redundancies and the government's priority would be to provide training and attract new jobs to the area.

He confirmed the �129m promised to the West Midlands Task Force would "remain available".

The government had played an "active role" in bringing Mr Towers and BMW together, said Mr Byers.

The news has been welcomed at Longbridge

"The government has not played the old role of throwing money at a problem in the hope it will go away," he said.

"But neither have we adopted the laissez-faire attitude of the last government - just standing to one side and doing nothing."

In response, shadow trade secretary Angela Browning welcomed the news but urged Mr Byers to monitor its progress.

"We welcome the fact that the Phoenix bid has been secured and we are particularly encouraged that it attracted financial support from the market," she said.

"I hope that, this time, you and your department will at least take an interest in Rover and not be the last to know what is happening in an important industry in the UK."

Jobs will be lost, but the Phoenix agreement does offer the chance for a secure future

Richard Burden, MP

Martin O'Neill, the Labour chairman of the Trade and Industry Select Committee, paid tribute to both Mr Towers and Mr Byers.

He said: "We know that you haven't had the easiest of rides on this issue but were it not for your persistence in backing the Phoenix proposal and making sure that it got on to the agenda it would not have reached the stage it did today."

Vincent Cable, trade spokesman for the Liberal Democrats, gave the announcement "a very warm welcome" and extended congratulations to Mr Towers and his team.

"Although this is unambiguously excellent news there is still a grave crisis in the car industry at large which may be highlighted in a few days by the announced closure of (the Ford plant at) Dagenham."

Earlier, Richard Burden, Labour MP for Birmingham Northfield, which includes Longbridge, hailed the deal as "a basis for a secure future for Rover".

"This is excellent news," he said.

"It is what many of us had been working very hard to achieve for some time. It will be a great relief for the workers at Rover and their families.

"It provides a basis for a secure future for Rover's brands and safeguards thousands of jobs, not just in Rover but in the supply chain."