The West Midlands is to get a government subsidy worth nearly £60 million to help the Rover car group continue its recovery.

Trade and Industry secretary Stephen Byers unveiled a package for proposals worth £59 million recommended by the Rover Task Force to modernise and diversify the region's economy.

Exactly a year ago the company, now re-named MG Rover group, was sold by its then owners BMW for a token £10 to the Phoenix consortium led by John Towers. The company, which has undergone a radical restructuring programme that saw its Land Rover arm sold to Ford, is set to announce that it has halved its losses and increased sales.

The West Midlands remains at the heart of the British motor industry with not only motor manufacturing conglomerates based there but also dozens of small and medium sized automotive component companies.

The money will help create a regional automotive centre to provide a single location for the Society of Motor Manufacturers and Traders, a regional automotive apprenticeship training scheme and help set up three high-tech "business corridors".

The spending will re-confirm the government's commitment to a region heavily reliant on manufacturing which has been hit hard by the high value of sterling. It will also bolster Byer's reputation among workers in the industry who in the past have claimed that he had failed to foresee the BMW decision and that of Vauxhall to end car production at Luton.

Speaking at an AEEU conference on manufacturing in West Bromwich, Byers said: "A year ago, BMW announced its intention to sell Longbridge to the venture capitalist Alchemy. Had that gone ahead only 1,000 to 1,500 people would now be employed at Longbridge. This compares to the 7,500 presently employed there.

"At the time of BMW's announcement we decided to provide £129 million of support for good quality projects in the region. This was to deal with the consequences of mass redundancy. When the Phoenix consortium was successful we nevertheless decided to keep the funding in place. Today's funding announcement is the final part of this commitment."

Byers said the grant would not only help support the car industry but break the region's reliance on it. "This money is key to the government's commitment to supporting workers in the region's automotive sector and the wider regional economy. This package of measures will help diversify the region's economic base so it is not too reliant on one industry or employer," he said.

Alex Stephenson, chairman of the Rover Task Force, said: "We believe this will help to accelerate the creation of a diverse and flexible economy, set out some 18 months ago in the West Midlands Economic Strategy. It will make us much better equipped to cope with the sort of economic shock we faced just one year ago. Along with our partners across the region, we will now get on with delivering those actions."