And on Friday night Ms Hewitt sent letters to SAIC and the Chinese government saying that the Government's door was still open to any deal.But this was desperate stuff. MG Rover is in administration, which means that anyone is free to make an offer for the company's assets SAIC may well want to buy part of MG Rover. However, it is understood that advisers to SAIC raised the prospect of the Government offering MG Rover a so-called "restructuring loan" which may have prevented it from getting caught by the EU law. The DTI never took this idea seriously, said a well-placed source.It was early April now and the Government was publicly insisting that it was doing all it could to secure the deal Privately, the Government had pressed the panic button. It had realised that there was a real chance of MG Rover going bust during the general election period and officials hit the phones to find a buyer.Predictably, SAIC pulled out of talks with Rover last week, and even a 25-minute call between Tony Blair and the Chinese premier couldn't rescue the situation.After the confusion on Thursday, when Ms Hewitt incorrectly announced the company had called in the receivers, MG Rover finally went into administration on Friday afternoon.Sensing a political storm brewing over the affair, Mr Blair flew straight from the funeral of Pope John Paul II to Birmingham, where he claimed that there was sill a chance of a deal with SAIC.

SAIC needed a guarantee that MG Rover would remain solvent until 2007. Despite this the DTI ploughed on with its plans for a six-month loan This was beginning to anger the Chinese. "The loan was largely irrelevant, because it did not provide the guarantees SAIC wanted," said a source close to the negotiations. "SAIC made their position perfectly clear, but this fell on deaf ears."The DTI insists that there was nothing more it could do, because under European state aid rules loans to companies must be repaid within six months. The Chinese media reported that the Beijing government was divided on whether to allow the state-owned SAIC to buy MG Rover Over at the DTI there were no such worries. "There was supreme confidence that the deal would be done," said one insider. "They seem to have badly misread the situation."By the middle of March the Government woke up to the fact that the deal was in grave danger.

SAIC had discovered serious financial liabilities within MG Rover, and Phoenix directors issued a distress call to the DTI.Patricia Hewitt dispatched a team of officials to Shanghai in an attempt to rescue the deal Their response was swift but flawed. The Chinese had plans to develop new MG Rover models - but it would take two years before the cars would hit the showrooms. More than £200m in fees is expected to be pocketed by lawyers as two massive commercial trials jostle for room in the Royal Courts of Justice this week. Tomorrow Equitable Life, the insurance group, launches its case against its former auditor and 15 of its ex-directors. This will open just down the corridor from the long-running battle between the Bank of England and creditors of the Bank of Credit and Commerce International (BCCI), which will enter its 180th day without a single witness being called.