ok guys.. went and had a chat to the engineer..
Here are his aswers ( all with respect to laws in SA)
Engine choice:
I can put what ever I want!..

There is no capacity restriction as such.. but SA is taking on thse national regulations which limit the capacity of the engine depending of the car weight.. so for a mini.. he estimated 3L!
As Ben said, turboing a NA or a supercharged car is not recommended, so he recommended best I stick with a stock turbo'd car and then tweaking it afterwards
I told him about the 4SGTE and the FWD SR20 off a bluebird.. he said the car would probably fly but he recommended I stick with something which has got an alloy block to keep things lighter.
Also, he said when we get into 2L territory, engine + gearbox might not actually fit but I will have to check this.
Suspension/frame :
I can do what ever I please.

. as long as it passes the brake and lane change tests!.. He said people in the past have even designed their own suspension.
wheel track is not an issue since it is going to undergo the tests anyway
I told him about the MGF frame and he thought it was the best option since the suspension is designed for a mid engined car and I'm not trying to location suspension components
What was interesting is that he mentioned the later model MGF's came with celica engines, so fitting 2L engines in this frame can be done
wheel size:
I can put what ever I want

He said increasing wheel size would help getting the power down to the ground, but going too large so that I have to cut front inner wheen arches and re-weld etc would be too much work.. but I do like the look of mini's with 15" wheels!
Other concerns:
He said since I am planning to dramatically change the weight distribution of the mini, a lot of suspension and brake tuning would be required ( dual master cylinders for the back and front etc)
Coil overs are allowed provided the mounting points are strengthened ( I think the MFG subframe comes with the hydro-pneumatic thingo's)
When he tested the twin engined mini, he said it was very noticable the weight at the back and how it affected the handling of the mini. taking the weight completely off the front would make this worse and the car would tend to spin out during braking while cornering so put as much weight as I can to the front ( same issues are present in the MR2's)
Engineering costs wont be too bad... its a bit of a longer engineers report plus usual track testing.. certainly not $16 grand worth!!
so.. this leaves me a LOT of options as to how I go about things.. more research I must do
Any more engine ideas are most welcome!
Pubs