About 5,000 Vauxhall jobs were thrown into doubt again yesterday when Lord Mandelson and the German Economy Minister effectively opened the auction for the carmaker to new bidders.

After meetings in Berlin, the Business Secretary said that Britain and Germany had received only a memorandum of understanding from Magna International, the Canadian car parts supplier, showing its intention to buy General Motors Europe, and that they were keen to talk to other bidders. It is understood that Fiat, the Italian carmaker, is still interested in buying General Motors Europe, which controls Vauxhall in Britain and Opel in Germany. Karl-Theodor zu Guttenberg, the German minister, said that he was also in bid talks with an unnamed Chinese investor who had approached him in the past two weeks.

Lord Mandelson said: “It is impossible to predict conclusively if the memorandum of understanding that we have now will translate into final agreement. We hope it will. But we also have to keep our mind open to alternatives if that memorandum of understanding does not convert into a final agreement. We are agreed on that.” The Business Secretary’s move was seen by some as an attempt to turn the screws on Magna by threatening to pursue other bidders in an attempt to extract more generous workforce commitments for Vauxhall’s 5,000 employees in Ellesmere Port in Cheshire, and Luton, Bedfordshire.

After his joint statement with Mr zu Guttenberg, Lord Mandelson met Siegfried Wolf, Magna’s co-chairman, privately at the British Embassy in Berlin.

Although Lord Mandelson said that the talks had been positive, it is understood that the two parties have not started discussing specific numbers — either for workforce commitments or the amount of state aid that Britain is prepared to commit in return.

Magna executives will meet Lord Mandelson again on Monday.

The talks over Vauxhall came as Lord Mandelson and the Prime Minister published a policy document addressed to the European Commission and the heads of the 27 member states. They warned that Europe must reinforce the single market, which has generated huge wealth for EU economies.

The Government also urged Europe strictly to enforce state aid rules, which had been rightly relaxed during the economic slowdown.

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