Ford has denied a Wednesday newspaper report that it is planning to build a $US273m car plant in Poland.

Citing government sources, the Puls Biznesu daily reported that Ford is close to signing a deal with Polish authorities to invest more than 820m zlotys in producing its Ka compact model in the southern city of Tychy, a Reuters report.

"I deny that we are planning to build a car factory in Tychy for 820 million zlotys," Monika Dobrolubow, spokeswoman for Ford's Polish unit, told the news agency.

She said that under an earlier deal with Fiat to cooperate on producing small cars in Europe [the Ford version of the shared platform will replace the current Ka subcompact], the two companies plan to produce 240,000 cars annually in Poland.

"Both companies are working on these models, which will be manufactured in Fiat's existing factory in Tychy," Dobrolubow told Reuters, declining to say how much the two companies will invest in the venture.

Fiat is the biggest carmaker in Poland with total production of mainly compact models reaching nearly 287,000 units in 2005, the report noted.