Magna deal chosen to save Vauxhall

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After lengthy talks, the German finance minister said his government had approved Magna's rescue plan for the European arm of stricken US car giant General Motors, which owns Vauxhall and Opel.

Business Secretary Lord Mandelson has already said he will be seeking swift confirmation from Magna that none of the 5,000 UK Vauxhall jobs will be lost in the deal to keep the car company afloat.

As far as German-based carmaker Opel is concerned, German finance minister Peer Steinbrueck said Magna International could now move ahead with its rescue plan.

The agreement will see Opel put under the care of a trustee later on Saturday.

The German government will provide a £1.3 billion bridging loan which will be available immediately. The plan is aimed at shielding Opel from GM's likely application for bankruptcy protection.

Magna was expected to agree a deal after Fiat pulled out of the bidding on Friday.

The carmaker operates two plants in the UK, at Luton in Bedfordshire and Ellesmere Port in Cheshire.

Magna has indicated that the deal will see the company pump more than £600 million into Opel.

The firm also plans 2,500 job cuts among GM's 25,000 German-based staff - far less than Fiat's plan to cut 10,000 German GM jobs if it took over.