A new generation of Minis designed to be family city cars could soon be in the production pipeline.

Reports have revealed a “bold plan” to introduce a highly efficient model line-up headed up by a car powered by an environmentally friendly electric engine.

Bosses at parent firm BMW have dismissed the reports in Auto Express magazine as “speculation” but admitted that they are working on developing vehicles suited to driving in continually growing cities and a concept could be launched at the Frankfurt Motor Show in September.

Mini spokesman Mark Harrison said: “We are working on something called Project i to provide city vehicles and timing would suggest there will be some sort of presentation at the Frankfurt Motor Show.”

Part of Project i has been the Mini E electric concept car which is currently being tested in the United States.

Rumours have also suggested that Mini parent firm BMW has been working with Fiat to revive the Italian manufacturer’s Topolino car as well as its own Isetta brand.

Mr Harrison confirmed talks had taken place with Fiat-owned Alfa Romeo about sharing of body platforms for a new model.

Meanwhile, Andy Hearn, general manager of Mini, has told the Oxford Mail that every effort is being made to boost sales in the recession, including the possibility of bringing forward plans for the introduction of new models and ramping up the company car market.

He said: “We are going to try to ensure the maximum sales result and if that means bringing models forward, then that is fine.

“I want to increase the number of fleet users by 50 per cent to take some of the reliance out of retail sales.

“We are not sitting and waiting for things to happen and we are in a fantastic position when the economy starts to move.”

Year-to-date sales figures for January and February show a 30.8 per cent drop compared to the first two months of 2008, at 21,702.

Mr Hearn has also backed a move by the Society of Motor Manufacturers and Traders to offer drivers of old cars a £2,000 incentive towards scrapping their vehicle and buying a new one.

A similar scheme operating in Germany has successfully boosted the new car market, increasing registrations by 21.5 per cent in February — the first year-on-year monthly rise since July 2008.

He added: “This is exactly the sort of initiative we would encourage. I believe Mini would really benefit from it.”