To date BMW has sold more than 800,000 Minis worldwide

Nearly 250,000 updated versions of the engine will be made at BMW's high-tech facilities at Hams Hall, Coleshill, Warwickshire, this year.

BMW kept the rights to the Mini when it split up MG Rover in 2000. The engines were produced in Brazil.

The model was launched in 2001 and has since gone from strength to strength.

In 2004, almost one-in-six cars sold by the BMW group was a Mini and to date, it has sold more than 800,000 models worldwide.

It's a British Mini built at Oxford with an engine from Hams Hall in the future, what else do you want? Harald Kreugar, managing director of BMW Hams Hall

More than 700 people currently work at the multi-million pound plant in north Warwickshire producing petrol engines for all BMWs.

The Mini is assembled at the firm's Cowley plant on the outskirts of Oxford.

Harald Kreugar, managing director of BMW at Hams Hall, confirmed to BBC News the creation of more jobs at the site.

"It's a British Mini built at Oxford with an engine from Hams Hall in the future, what else do you want?

'Dynamic car industry'

"You'll be driving around a British roundabout with a British engine in a British product and we will definitely have more jobs at Hams Hall."

Richard Lambert, director general of the CBI, toured the Hams Hall plant on Friday and said the UK can still boast a dynamic car industry.

"The UK exported more motor cars last year than it has for many, many years so there is a dynamic motor car industry in this country. Of course, there are problems, but there is also innovation."