The deal is the third sale of land at Longbridge in under two years

The sale, which was revealed on Tuesday, saw St Modwen Properties pay �42.5m for all but 20 acres of the 248-acre complex.

The car group plans to rent the land back from St Modwen and reinvest its windfall in the business.

MG Rover lost �100m in 2002 and this is the third land sale made by the company in under two years.

In April 2002, MG Rover's parent company, Phoenix Venture Holdings, sold 42 acres of surplus land for �11.3m and disposed of a further 18 acres for �5.6m in December last year.

Long-term lease

Both sales were agreed with St Modwen and regional development agency Advantage West Midlands, which plans to build a high-technology business park on the site.

MG Rover chief executive Kevin Howe confirmed the deal would generate cash for product development.

He said: "It puts to work one of our assets, but in no way restricts the day-to-day running of our business."

The company, which was bought for �10 from BMW by a consortium of local businessmen in May 2000, has a long-term lease of up to 35 years on the site at an initial rent of �3.6m and an option to renew.

Engine plant

Richard Froggatt, executive director of St Modwen, said the latest transaction was very similar to its other sale-and-leaseback deals with industrial giants such as Corus, Goodyear and Alstrom.

"We set up a partnership with MG Rover in 2001 to regenerate land which was surplus to operational requirements," he said.

"We are delighted to extend our relationship with MG Rover to support the ongoing operations."

It is believed the latest deal does not include the 186 acres occupied by the Powertrain engine plant.