The baby SUV concept, a potential rival for the likes of the Nissan Juke, was revealed previously at the Beijing motor show in 2012.
At the time it was said to be a design study to judge reaction to its retro themes, as opposed to a potential production car. MG now says the reaction was so strong that it could be made.
"There is clearly room for such a car in the market, with small SUV sales expected to grow rapidly," said MG UK sales and marketing boss Guy Jones. "The question at the moment is whether we build a style led but less practical version, or a less stylised but more spacious model."
Insiders say the more sporty version of the Icon is favoured internally, as it could be used to build recognition of the MG brand as it pushes sales in to Europe. However, Jones insisted no decision had been taken yet.
"If we build a production version of the Icon it will follow behind the larger SUV hinted at by the CS concept here in Shanghai," he said. "But whatever we do will be led by the global requirements - any production car we build needs to sell in every region, not just Europe."
MG's European expansion will focus initially on growing MG6 and MG3 sales in right hand drive markets such as Ireland, Cyprus and Malta. It will then move in to Benelux and Scandanavian regions where the brand is well known, then Eastern Europe and then more established markets such as Germany, France and Italy.
"We have to take it step by step," said Jones. "As a totally new company we need to build the infrastructure and know-how in each market before we try launching lots of new products.
MG now sells cars in 40 countries worldwide. Last year it sold 80,000 cars in total.