Structural and magnetization measurements have been performed on the La0.7Sr0.3Mn0.85Nb0.15-x5+Mgx2+O3 stoichiometric compounds. With rise of the Mg2+ content the formal oxidation state manganese increases from +3 (x=0) up to +3.55 (x=0.15). The compositions with 0⩽x≤0.08 undergo a structural transition from rhombohedral to orthorhombic symmetry below room temperature whereas x=0.1 and x=0.15 compounds are rhombohedral down to 2K. The structural parameters evidence that the orthorhombic phase is not long-range orbitally ordered and that the structural transition is associated with a steric effect. The Mg-free compound is ferromagnetic with the Curie point of around 150K and a magnetic moment of 3.1 μB/Mn. The substitution of Nb5+ with Mg2+ leads to a gradual weakening of the ferromagnetic component while in the x=0.15 compound A-type antiferromagnetic short-range order is stabilized in spite of macroscopic R3¯c symmetry. All the compositions show insulating behavior. It is suggested that ferromagnetism is originated from superexchange interactions via oxygen. Covalence enhances the positive part of the superexchange interactions whereas structural disorder induced by Nb5+ and Mg2+ ions leads to suppression of ferromagnetism.