BMW had said it would go to Hungary if the UK did not deliver the financial incentive to remain at Longbridge. But the EC says it remains to be convinced that Hungary really was an option.

The Hungarian government had said as much - and that would technically rule out the UK deal. Punch drunk EC spokesman Stefan Rating: ``If the UK government failed to prove that there was an alternative site and that the aid was designed primarily to ensure that investment went to Longbridge as opposed to an alternative site, then we could not allow the aid.'' It now falls to the German car maker to prove that Hungary was an option. A BMW spokesman said ``We are confident that the grant is within the EU regulations.'' The renewed doubts mean further uncertainty for the thousands of Longbridgeworkers. The Transport and General Workers Union's Tony Woodley said: "I feel desperately disappointed for our people.

``They must be punch drunk with despair. I thought the other day we could lay this crisis to rest, but unfortunately outside interferences mean we must continue to fight our battle now in Europe. ``There may be some politics being played, the European Commission are asserting themselves saying, `Don't forget it's us who makes the final decision'.''

The outgoing European Competition Commissioner, Karel Van Miert, warned on Thursday he was concerned about the legality of the state aid package. ``State aid cannot be handed out without the authorisation of the commission,'' he said. ``There is still a lot to be sorted out and nothing can be taken for granted,'' Van Miert said, adding that he had warned BMW before. Crucial for West Midlands jobs Longbridge - in Birmingham - is one of the UK's biggest factories and one of the main employers in the area, with a workforce of 14,000.

Another50,000 people are employed across the region by its suppliers. Under BMW's redevelopment plan, Longbridge will be transformed from one of Europe's least productive factories into a state-of-the-art modern plant. A meeting with the EC will take place on 7 July at the request of the UK Department of Trade and Industry, the spokesman said. The two sides met for the first time on the issue on 11 May, but the Commission says it still lacks information.

EU sources say the commission could not block all the aid, but stress that Mr Van Miert has been angered by BMW's apparent tactic of playing the UK off against Hungary to get more subsidies. The practice is not unknown in the car industry, but the commissioner would like to make an example, especially when the recipient of taxpayers' money is a profitable firm like BMW.