A bidding war between the British, German and Spanish governments over which state should benefit from a new Ford car engine investment of up to £350 million sterling (€538 million) is expected to come under close scrutiny from the European Commission.
The contest, for the high-volume production of a new family of engines code-named 14/15, comes just weeks after the British government approved aid of more than £150 million for a £1.7 billion new car project at BMW's Rover Group subsidiary at Longbridge in central England.
BMW said without the aid the project would have gone to a non-EU country - in this case, Hungary.
To comply with EU competition rules it is necessary for a company to demonstrate that a project would leave the EU in the absence of aid.
But the BMW project was viewed with suspicion by the Commission, which could find little evidence that Hungary had been seriously assessed.
It is now faced with the prospect of a similar situation in the Ford case. Ford's factory at Bridgend in south Wales, its Valencia plant in Spain and a third facility at Cologne in Germany are all candidates for the project - as is a plant in north America, British government officials have been told.
The factory in Wales is the company's leading engine plant in Europe, producing some 442,000 engines last year. It also produces V8 engines for Ford's Jaguar offshoot.
The British prime minister's office confirmed yesterday that Mr Jac Nasser, Ford's president, and Mr Ian McAllister, chairman of Ford of Britain, met Mr Tony Blair for half an hour in London yesterday.
The meeting was said to have been arranged some time ago to talk about broader issues, but it is understood that the Welsh plant's chances of securing the project was also discussed.
The Welsh Office confirmed that it had been in discussion with Ford about the factory, at Bridgend, for some months but described as speculation reports that it had offered a £30 million subsidy. It said Ford had yet to make a formal bid for government funding.
Mr Alun Michael, then chief minister for Wales in the Blair government, pushed the case for Bridgend during a visit to Ford's Detroit headquarters in March.
He spoke with Mr McAllister yesterday and following the meeting in London said he would stay in close touch with the company. "My aim is to ensure that everything possible is done to give Bridgend the strongest possible case in competing for new investment," he said.
Officials pointed out that Mr Blair has regular meetings with top executives from large multinationals operating in the UK.
Mr McAllister is also a member of the government task force overseeing the New Deal welfare-to-work programme.
