Saab, the Swedish arm of General Motors, was in a race against time last night after an emergency board meeting broke up and reports circulated that the Swedish carmaker was set to file for protection from creditors.

The meeting is believed to have been adjourned without a decision on whether to push ahead with a reorganisation of the company, which is an alternative to an outright bankruptcy filing.

Whether the company, which has been producing cars in Trollhattan, southern Sweden, since 1949, can be saved remained unclear.

A union spokesman, said: “The meeting has been adjourned, and we may have something to say tomorrow, but at this point we do not know,”

He refused to comment on the contents of the discussions held in the meeting. A Saab spokeswoman declined to comment.

The depths of Saab's troubles were exposed earlier this week when GM said the division could file for bankruptcy protection within days but that it still hoped to reach an agreement with Sweden on aid for the brand.

GM said that it would cap finance to the operation by the end of this year. The move, part of a huge restructuring by General Motors, which will cut 47,000 jobs worldwide, would effectively cut Saab adrift.

However, the Swedish Government reiterated that it did not plan to step in with cash even if the company was forced into a restructuring.

It has accused GM of shirking its responsibility as an owner and that talks over state aid for Saab were unrealistic.

A spokesman for the Industry Ministry said: “It's not like we are going to change opinions just because Saab is in a reconstruction phase. We think Saab's business plan is too optimistic.”

Martin Skold, an assistant professor at the Stockholm School of Economics, who analyses the car industry, said that any reorganisation would need to define the legal relationship between Saab and GM, its parent.

Cutting legal ties could save GM hundreds of millions of dollars in costs if Saab were to go bankrupt.

Under a reconstruction, a Swedish court appoints a supervisor who is in charge of reducing the company's debt by 75per cent.

The court assesses the progress after three months and decides whether to extend it to as much as one year or to liquidate to pay creditors from the proceeds.

Saab has been losing money since 2001. In 2007, Saab made a SKr2.1 billion loss and last year Saab's sales fell 25 per cent to 93,295 vehicles, only 1.1per cent of GM's total.

Swedish unions fear that if Saab collapsed, the jobs toll would hit 15,000 from losses in the supply chain and other activities.

Saab story

— Saab was founded in 1937 in Trollhättan

— Its first car, the Saab 92001, was produced on June 10 1947

— In 1968 it merged with truck maker Scania-Vabis

— General Motors bought 51 per cent of the automobile division in 1990 and acquired the rest a decade later

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