The German goverment has played down rumours that General Motors (GM) is looking to retain its Opel and Vauxhall operation in a major u-turn.

Several media reports have said GM is now trying to raise funds for Opel from the US and European governments.

GM postponed its decision for a preferred bidder for its European business and still needs to decide between the German government favoured Magna or Belgian financial group RHJ.

Fred Irwin, chairman of the German government-backed trust created to facilitate a sale, believes a decision will me made of the sale of GM’s European business before the Frankfurt Motor Show on September 14.

He put down claims that GM is looking to keep Opel and Vauxhall.

Irwin said: “GM has no interest in keeping Opel and is working towards a commercially reasonable solution.”

The idea of GM keeping hold of Opel has prompted opposition from German unions which has been lobbying for a sale to Magna.