American International Group, the insurance giant bailed out this month with an emergency $85 billion (£48 billion) government loan, announced plans on Friday to slim down operations dramatically while seeking new funds to repay its debts and return the group to profit.

It plans to dispose of at least ten businesses, including its International Lease Finance aircraft leasing unit; American General Finance, the consumer lender; and its life insurance and pension operations in America, Europe, Latin America and Japan. It might also sell its US car insurance unit. The group is to focus on its core property and casualty business, its foreign general insurance operations and its foreign life insurance unit.

It has not listed the assets for sale and is not expected to sell all the businesses that fall outside the core areas. Instead, it will evaluate offers before making decisions. AIG, which is working on the disposals with Blackstone and JPMorgan Chase, will sell as many businesses as necessary to pay off its loan and stabilise its position.

Edward Liddy, who began running the company after the government bailout, said: “Our goal is to emerge from this process as a smaller, but more nimble company that is solidly profitable and has attractive, long-term growth prospects. We'll have a very secure position. This is going to be a formidable company.”

Mr Liddy, who disclosed that AIG has spent $61 billion of its loan so far, and expected to use more, said that he had received “dozens and dozens” of offers from would-be buyers,

Hugh Johnson, founder and head of Johnson Illington, the American fund manager, said: “AIG looks to be taking a very sensible approach to righting the ship. It can pay off its loan to the Fed and be left with assets that could be very profitable. There is plenty of interest for the assets.”

Warren Buffett, the world's richest man, Maurice “Hank” Greenberg, the former chief executive of AIG, and Munich Re, the world's largest reinsurer, are among potential buyers that have expressed interest in parts of the business.

AIG's Asian operation is expected to attract interest from rivals such as HSBC, Prudential, Aviva, China Life and ING. The group is hoping to sell its American life, retirement and pensions businesses and a minority stake in its overseas life insurance business in one deal.

Although AIG's Alico life insurance unit, which operates in Europe, Latin America, the Caribbean, the Middle East and Japan, is up for sale, the company hopes to retain a majority stake “if at all possible” in its AIA life insurance division, which operates in fast-growing countries such as China, Singapore and Malaysia.

While AIG's business is generally solid, it suffered billions of dollars of writedowns on insurance policies relating to mortgages and other securities.

The Government was forced to bail out the company to prevent a meltdown that would have dragged down much of America's banking system. Washington is holding a 79.9 per cent stake in AIG in return for the loan.In early trading on Friday, AIG's shares jumped by $0.72, or 18 per cent, to $4.73.

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