SAIC and MG Rover are still finalising their joint venture and reports of £1 billion pounds ($US1.86 billion) in investment were premature, the companies told Reuters on Wednesday.

Beijing still had to approve terms of any deal that would help rejuvenate Rover's model range and give state-run SAIC a beachhead in Europe as well as access to technology and expertise, the companies reportedly said.

"In fact, we're still in negotiations. There's been no final conclusion. As to the investment or scope of cooperation, we're still unsure," Xue Hao, a spokesman for Shanghai Automotive Industry Corp., told Reuters in Shanghai, adding: "We don't know when anything will be formalised."

Reuters said the Times newspaper, citing an unnamed senior management source, said SAIC found British media reports over the weekend of an imminent billion-pound venture "embarrassing".

"The programme of the deal is still under discussion and we still have to talk about many details," the Times reportedly quoted the unnamed source as saying. "We read in the British press that we are going to invest £1 billion pounds in Rover, but it's not like that. That's not how it works."

MG Rover spokesman Stewart McKee told Reuters the media, and not his company, had introduced the billion pound figure. He reportedly expressed confidence that the partners would strike a deal by early next year on forming a joint venture.

"The purpose of the joint venture company is the development of new products which will take investment from Shanghai Automotive and will take skills, design and engineering expertise from MG Rover," he told the news agency.

The precise level of ownership of the venture is not cast in stone, he told Reuters, but added: "The principle is that SAIC will have a majority interest in the joint venture company but I think you will find that in a practical way the partnership is even because we both need each other evenly."

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