OXFORD’s Mini plant is the favoured location for building the new electric version of the car despite Britain leaving the EU, it has been claimed.

Two sources told Reuters this week BMW bosses are leaning towards the UK plant, where it has invested heavily since 2001.

Any decision by the German carmaker to commit to further spending at the Cowley factory would be a boost to the Government, which has been warned by businesses at home and abroad that Brexit will hit investment.

BMW makes about 60 per cent of its approximately 360,000 compact cars at the Cowley factory. Asked whether the electric Mini would be built in Britain, a BMW spokeswoman said: “A final decision has not been taken.”

BMW has said it has several options about where to build the vehicle, including at a plant operated by VDL Nedcar in Born, Netherlands, where a plug-in hybrid version of the Mini is already being built, or a plant in Regensburg, Germany.

BMW has about 4,600 staff working in Oxford, while VDL currently employs around 4,500. That is set to rise to more than 5,000 after production of the BMW X1 model is added to the Dutch plant in August, a sharp rise from only 1,500 in 2012. Carmakers have been among the most vocal critics of Brexit, warning their global supply chains will be hit hard by any resulting introduction of tariffs.

But they are also keen to have a strong position in Europe’s second-biggest car market behind Germany, particularly if they can secure government guarantees.

The electric Mini will use an electric motor, components and a battery delivered from BMW’s Dingolfing and Landshut plants in Bavaria, Germany.

BMW executives believe a deal on tariffs can be struck, the source said.

Britain’s department for business, energy and industrial strategy declined to comment.