FEARS are growing for the future of 5,500 British jobs at Vauxhall Motors after Germany agreed a deal with the new owner of the European arm of General Motors.

The American car firm is expected to file for bankruptcy in a New York court tomorrow.

Its European operations are being taken over by Magna International, a Canadian motor parts group, and the German government has moved quickly in an attempt to secure most of the 25,000 jobs at Opel plants based in the country.

Union leaders in Britain fear that if there is overcapacity it will be the Vauxhall plants at Luton, Bedfordshire, and Ellesmere Port, Cheshire, that will suffer cuts or closures.

Under a deal agreed late on Friday night the German government is providing an emergency loan of £1.3 billion to Magna, which has backing from a Russian bank.

Peter Mandelson, the business secretary, said Magna had made clear it was committed to continuing production in the UK. But he added: “Of course, it will involve change. There is excess capacity.”

Derek Simpson, joint head of the Unite union, said that the British government could have been more closely involved in the talks in Berlin which were attended by Angela Merkel, the German chancellor. Magna has indicated there will be 2,500 job lossses in Germany.

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