Stefan Krause, BMW's boss of sales and marketing, has finally gone on record to confirm the rumours. The German carmaker thinks it might need a new 'green' brand.

The mighty Munich operation must find a way to "satisfy growing pressure for vehicles with better economy" Krause has been quoted as saying. Interestingly, BMW's researchers have concluded that the BMW brand cannot be stretched much further from its 'ultimate driving machine' position. So while it has made impressive gains with its Efficient Dynamics programme, fundamental changes to the brand are out of the question.

Instead, BMW might need a range of smaller, lighter front-drive models to build up into a big-selling global business. Such a move would also help meet future binding fuel-economy targets in Europe and the US (the EU looks like it will join the US in setting economy targets and then fining carmakers for selling vehicles that don't achieve them).

The answer to BMW's problem is easy. Expand Mini. Build a new, bigger platform that could underpin a 4m-long five-door hatchback, a small crossover, high-roofed estate, compact coupés… The possibilities are endless.

But it won't happen. According to a recent interview with Krause, BMW Doesn't want to further extend Mini's line-up beyond the upcoming crossover model for fear of diluting the Mini's 'quirky appeal'. When I read that alarm bells went off.

In 2006 a source in the US told Autocar that BMW's Designworks studio had come up with a new Triumph (BMW owns the badge) roadster proposal based on the Mini cabrio.

The idea was to make Mini more of a standalone brand. With both Mini and Triumph models, the dealerships and the overall business would be more self-sustaining. Apparently, the dealers rejected the idea as potentially too complex and expensive. They already had one 'new' brand on their hands.

One of the reasons for making the Mini brand more independent, the source insisted, was that BMW bosses are still so scarred by the experience of owning Rover Group, that they are instinctively suspicious of Mini.

When the brand was launched in 2001, many feared it would do well for a few years and then fade. In fact, sales were up 20 per cent in 2007 to over 220,000 cars.

It's said that BMW wants to keep Mini separate from the rest of the company so that if sales collapse, it will be easy to sell Mini off. Krause's suggestion that Mini will not be allowed to expand much further seems to confirm that BMW still regards Mini as a potential problem rather than an opportunity.

It is madness for BMW to say that it wants to divert into more economical cars, yet won't exploit the booming Mini brand.

And why, instead, would the Germans take the huge risk of trying to create an eco-brand from scratch?