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I have confirmation of this. (archive)
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Posted by JimS on March 29, 2002 at 18:41:16:

In Reply to: now I know why; the next gen M5 will have V10. posted by Forstner on March 29, 2002 at 14:45:20:

I just flew in from Germany and I have the article fro Bangles, the design chief that the M5 will have a V10 500hp engine. The rest of the article is even more interesting about the new 5. I will scan and post this weekend.

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