Saab, the embattled carmaker, filed for bankruptcy protection today after losses threatened its survival.

The carmaker, owned by America's General Motors and famous for comparing its saloons to fighter jets, said that it would file for a reorganisation plan, a Swedish legal procedure which safeguards its assets from creditors.

"We explored and will continue to explore all available options for funding and/or selling Saab," Jan-Ake Jonsson, the managing director, said. "It was determined a formal reorganisation would be the best way to create a truly independent entity that is ready for investment."

Saab said that it would seek funding for the company from both public and private sources during the reorganisation process.

Yesterday it was reported that General Motors was prepared to pump in $400 million to help Saab to become profitable if the Swedish Government guaranteed to match its stake.

Unnamed sources told Dagens Industri, a Swedish daily newspaper, that the American company had made an offer to put 3.5 billion Swedish kronor (£280 million) into the firm if the Swedish Government guaranteed a 5.2 billion kronor loan to Saab.

Part of the money would be used to launch new models and part to cover the loss made by Saab last year. The goal is to help it to reach annual sales of between 120,000 and 130,000 vehicles, which would make the carmaker profitable by 2011 or 2012, the paper reported.

However, many analysts signalled that Saab would need considerably greater funds to turn it around.

The Swedish Government on Wednesday ruled out owning carmakers or their factories and accused GM of shirking its responsibility as an owner.

"The Swedish state is not prepared to own car factories," Maud Olofsson, the enterprise minister, said. "We are very disappointed in General Motors. But we are not prepared to risk taxpayers money, this is not a game of Monopoly."

Saab employs 4,100 workers in Sweden, with another 10,000 jobs linked to sub-contractors, making it an industrial powerhouse in a country of only nine million. Unemployment is already rising at an alarming pace. It jumped from 6.4 per cent to 7.3 per cent in January alone.

GM could save hundreds of millions of dollars in costs if Saab were to go bankrupt. The company is under pressure to phase out the lossmaking car brand as it struggles to demonstrate its financial viability to the US Government. It must present a restructuring plan to the US Treasury by March 31 as a condition of its $13.4 billion emergency bridge loan.

In a business reorganization, the company seeks protection from creditors while it comes up with a plan to become profitable. It is an alternative to bankruptcy, said Sven Save at Ackordscentralen, a Swedish consultancy firm which handles insolvency issues.

A reconstruction plan could mean measures such as job cuts, a sale of assets or a debt writedown.

Creditors who risk not getting any money at all if the company goes bankrupt, have to be convinced at a first court hearing that lowering their claims is in their best interest.

GM said this week that as part of a sweeping restructuring of its global operations, it aimed to sell Saab along with other underperfoming businesses including its Hummer brand.

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