Many miles to go in the Rover saga

The news that talks between BMW and Alchemy partners had collapsed was greeted with premature cheers in the West Midlands on Friday. Trade union leaders and Longbridge workers seemed convinced that with Alchemy out of the frame, the path was made much easier for its preferred bidder for Rover, the Phoenix consortium fronted by John Towers, which had promised fewer redundancies.

The reality, however, isbleaker. BMW has agreed to talk to Phoenix, but it warns that the closure of Longbridge within a month is more likely. Buckets of cold water are being thrown on Phoenix's prospects not only by Alchemy boss Jon Moulton, but also by the chairman of the Commons' trade and industry committee, Martin O'Neill, and by a former managing director of Austin Rover, Harold Musgrove. As we report on page 1, all sides are piling the pressure on the Secretary of State for Trade and Industry, Stephen Byers, to come up with cash to prop up the Phoenix bid. In the week when the Treasury has landed £22.4bn for selling off five phone licences, such demands may seem hard to resist.

But resist them he should, at least for now. The brinkmanship being played out over the jobs of thousands may be hard to bear, but it has a long way to run yet. Mr Moulton's insistence that Alchemy will register no further interest in Rover reminded many listeners of Michael Heseltine's pledges that he would not stand against Margaret Thatcher "in any foreseeable circumstances". Now as then, unforeseeable circumstances have a habit of turning up. We would not be surprised to see Alchemy back in the running.

But Phoenix, too, is trying to win concessions and cash from the Government. If Mr Byers blinks first, the taxpayer could find it a costly mistake. The time may come when the Trade Secretary will need to pull out his chequebook to help the workers of Longbridge. But not just yet.