BMW is on the verge of announcing that it is to bring an electric version of the Mini to its Cowley plant in Oxford.

The company is understood to be close to giving the green light for zero-emission Mini models to go into production in 2026 after securing taxpayer support.

BMW had always maintained that Oxford had a future in producing electric Minis. However, it did not expect to go into production of a future model until 2030 at the earliest. Ministers were dismayed by that and are thought to have accelerated support for bringing the electric Mini back to Oxford.

It was reported by Sky News that BMW has secured £75 million from the Automotive Transformation Fund. It is likely that Jeremy Hunt, the chancellor, could announce details of that in next week’s budget. The total investment in Oxford could be as high as £600 million, securing thousands of jobs.

The decision comes at what had looked like a crossroads for the British automotive industry following the collapse of the Britishvolt gigafactory in the northeast leaving the country with no significant battery-making capability; and the departure of Arrival from the UK, a start-up that had promised to build thousands of electrics vans and hundreds of electric buses from new facilities in Oxfordshire.

UK car production has collapsed to a near 65-year low, to just before the time that the original Mini was launched in 1959. Established Japanese manufacturers, Nissan and Toyota, have delayed commitments in bringing new models to their factories in Sunderland and near Derby. Honda and Vauxhall have quit production in the UK and Ford recently announced 1,300 redundancies and a scaling-back of its world-leading research and development facilities in Essex.

Speaking last year, Stefanie Wurst, the German executive who heads Mini, said: “Oxford is not geared up for electric vehicles. It will need renovation and investment.”