President Barack Obama said that his administration's bankruptcy plan for General Motors (GM) was “viable” and “achievable” and would help the car maker rise again “quickly".

Mr Obama was speaking after GM filed for bankruptcy protection this morning in a deal that will see the US Government take a majority stake in the debt-laden firm and pump in $30 billion of extra investment.

“Our goal is to get GM back on its feet, take a hands-off approach and get out quickly,” Mr Obama said.

“Working with my auto task force, GM and its stakeholders have produced a viable, achievable plan that will give this iconic American company a chance to rise again,” he said.

The President said that the decision had been a last resort: "The collapse of these companies would have been devastating for countless Americans and brought enormous damage to our economy beyond the auto industry.”

Mr Obama added: “We’re making these investments not because I want to spend the American people’s tax dollars, but because I want to protect them. We are acting as reluctant shareholders because that is the only way to help GM succeed. What we are not doing -- what I have no interest in doing is running GM."

GM filed for bankruptcy in the US Bankruptcy Court in the Southern District of New York just before 8am in a move that will clear the way for a sweeping reshaping of the famous company.

It is the largest industrial bankruptcy in American history and the third largest overall.

The filing — number 09-50026 — was signed by Fritz Henderson, chief executive of the stricken carmaker.

Weil Gotshal & Manges, one of New York's best-known bankruptcy law firms, will represent GM through the Chapter 11 process, according to the filing.

The filing also set out the company's 50 largest creditors. Deutsche Bank was one of the biggest, with $4.4 billion of bonds outstanding.

The move, which has been expected for weeks, will see the US Government take a 60 per cent stake in GM, officials of the Obama Administration revealed yesterday.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive