The Far East giant broke its silence to confirm that talks for the joint venture deal that would “secure the future of car making at Longbridge” were progressing well.
A Shanghai Automotive spokesman stressed the deal had the full backing of the Chinese government but could not give a definite date on completion.
But he refused to be drawn on reports that there would be redundancies at MG Rover as a result of the agreement.
Reports had suggested that 3,000 of the manufacturer's 6,000-strong workforce would be axed after the deal was completed.
But MG Rover bosses have played down the speculation, claiming that manufacturing at Longbridge would be stepped up in the wake of the joint venture.
Rod Ramsay, the car maker's sales operations director, told Motor Trader: “Our prediction is that we will be making more, not less, cars at Longbridge.
“We are already taking steps to be a bit leaner but the people who are claiming that everything is falling apart for us are wrong,” he said.
Meanwhile trade union officials were due to meet with MG Rover late last week claiming employee futures would be “top of the agenda”.
A spokesman for the Transport & General Workers Union said: “We would certainly take any news of redundancies very seriously but we are conscious that the current reports are based on rumour and speculation.
“MG Rover has also given us a commitment that we would be consulted on redundancies if the situation arises.”