Germany's Economic Minister today branded a decision by America's General Motors (GM) to scrap the sale of its European business as "totally unacceptable."

Rainer Bruederle condemned the car giant's eleventh-hour U-turn on the deal to sell Opel and Vauxhall to Magna, a Canadian car parts supplier, and demanded immediate details of GM's new plans. Christine Lieberknecht, the premier of Thuringia state, which an Opel plant is based, called the decision a“low blow”.

GM's move is a particular surprise for Angela Merkel, Germany's Chancellor, who had lobbied hard for Magna and Sberbank, its Russian partner, to buy Opel as the best way to preserve German jobs.

Juergen Reinholz, economy minister of Thuringia, said GM had signalled it would repay a €1.5 billion German bridging loan for Opel by the end of November.

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Lord Mandelson said that he was keen for "very early discussions with GM over their plans for the business and how they will affect British plants and workers."

He added: "I have always said that if the right long-term sustainable solution is identified then the Government would be willing to support this."

British unions were delighted with the decision, which was announced late yesterday after a GM board meeting in Detroit.

The deal had threatened thousands of jobs at Vauxhall's Ellesmere Port and Luton plants which employ 5,500 staff, although a plan had been agreed that would have saved far more workers than had been initially expected.

Tony Woodley, joint leader of Unite, the union, said the decision was "fantastic", adding: "There is no logic in breaking up the company. I believe it is the right decision for Britain and our plants."