The US Government will take a 60 per cent stake in General Motors (GM) as the carmaker files for Chapter 11 bankruptcy protection today, officials of the Obama Administration revealed.

President Obama said that the move would stop the company being broken up, as it prepared to make the world’s largest industrial bankruptcy filing.

The United Auto Workers (UAW) union will take 17.5 per cent in shares and the governments of Canada and Ontario will lend $9.5 billion (£5.9 billion) and get 12 per cent equity and $1.7 billion debt in return.

The US Government will provide an additional $30 billion in financing to get the giant through bankruptcy.

"We intend for this to be a permanent resolution of the GM situation," an official said early this morning, emphasising that there would be no further taxpayer cash. This is it for GM on a go-forward basis."

GM will close 11 facilities and idle a further three. The US Government expects GM to be out of bankruptcy in 30 to 60 days.

The UAW will be able to put in one independent director, as will Canada and Ontario, but Obama Administration officials said that they expected a significant clear-out of the existing GM board by the time the company emerged from bankruptcy.

Mr Obama is expected to emphasise today that the Government will take a backseat, "hands-off" role on everything but corporate governance issues.

No government employee will serve on the board or work at the company and the Administration plans to offload its stake "as soon as practicable".

An official said: "Our goal is to promote strong and viable companies that can quickly be profitable and contribute to economic growth and jobs without goverment involvement."

The path to a bankruptcy was cleared when 55 per cent of GM’s unsecured creditors agreed at the weekend to accept equity of up to 25 per cent in a restructured group in return for giving up $27.2 billion of debt.

GM will name Al Koch, a turnaround executive from Alix Partners, the advisory firm, as its chief restructuring officer to steer it through Chapter 11.

The agreement also opens the door to fees worth many millions of pounds for accountants handling the European side of GM, with Ernst & Young (E&Y) thought to be in pole position. E&Y was involved with the collapses of Railtrack and the Icelandic banks.

Fritz Henderson, the chief executive of GM, is due to detail the Chapter 11 procedure today in New York.

Mr Obama is expected to make a speech today in which he is likely to emphasise his commitment to making over the ailing American motor manufacturing sector.

In an interview screened by NBC News on Saturday, the President said that he would have preferred to avoid taking a large government stake in GM.

"But the alternative was to see a liquidation, bankruptcy in which an enormous institution with huge importance to our economy simply gets broken up into pieces," he said.

The bondholders will be given an initial 10 per cent of the new company, plus warrants to buy a further 15 per cent if GM’s value rises to hit certain targets.

Shareholders are wiped out, GM’s bankruptcy filing will be the third-largest in American history, based on the $91 billion of assets held by the company at the end of 2008.

The collapse of Lehman Brothers, the Wall Street bank, last September was the largest, at $639 billion, with the collapse of WorldCom, the telecoms company, in July 2002 being the second-largest, at $104 billion.

Chrysler, GM’s smaller rival, filed for Chapter 11 on April 30 and is expected out of bankruptcy by the middle of this month.

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