THE curse on the British motor industry goes on. After winning the bidding war for the remains of MG Rover, the company's new Chinese masters are finding it hard going.

The Nanjing Automobile Group (NAG) stunned the business world when its bid for the failed British company succeeded.

Industry pundits had expected the wreckage of MG Rover to fall into Chinese hands. But most expected the winner to be Shanghai Automotive - Communist China's biggest car maker and not a relatively small outfit, like NAG.

Rover's new owner appeared unperturbed. It announced plans to make a range of Rovers. The new cars would be manufactured at home and on the old British Leyland Longbridge site, in the Midlands.

It also hoped to restart UK production of the MG ZT and TF sports car in partnership with GB Sports Car Limited, a company set up by former employees of MG Rover's engine making subsidiary, Powertrain.

But now those plans seem to be in jeopardy and NAG's ambition has left it at loggerheads with the Chinese government.

Communist leaders in Beijing, concerned about massive over-production in the car industry, are said to have told NAG its plans are "over ambitious".

A huge car plant in Nanjing may now be put on ice. If it does not get the go-ahead, NAG will not be able to build Rovers.

Chinese ministers are furious with local authorities that have promoted car manufacturers as China's "national champions", accusing them of pouring millions into building factories, that are not needed, for political gain. They are determined to tackle the problem.

NAG's president Wang Haoliang insists the re-birth of Rover will still go ahead, although he recently admitted: "People say our purchase is like a snake eating an elephant - it fattens the stomach and makes you very happy, then turns to disaster in two years."

But NAG may not have that long.

The Longbridge lease is up for renewal within weeks and, if NAG does not commit to car manufacture on the site, it will lose the chance to restart production.

Sources close to GB Sports Car Limited have also claimed the deal is on the brink of collapse.

That would allow NAG to walk away from Britain with the rights to MG and Rover cars without the loss of face the admission that it could not re-start UK production would involve.

Some believe the company may be forced into a joint venture with Shanghai Automotive if it really wants to start making Rovers in China.

Ironically, that would leave NAG in the same situation as bosses at MG Rover found themselves last year.

Will the outcome be the same? Only time - and lots of money - will tell.