Lord Mandelson assured the chief executive of General Motors yesterday that the Government was prepared to support the American carmaker’s business plan in the UK to protect Vauxhall jobs.

The Business Secretary phoned Fritz Henderson at his headquarters in Detroit yesterday morning. During the conversation, Lord Mandelson, who has led the talks to save Vauxhall, said that the Government would offer financial assistance in the form of multimillion pound loan guarantees in return for job commitments.

On Tuesday evening, the board of General Motors decided “on the flick of a coin” that it would scrap plans to sell its European operations, which include Vauxhall in Britain and Opel on the Continent.

The U-turn triggered fury in Germany, which had been banking on a sale to Magna International, a Canadian car parts group that had promised to safeguard the bulk of German jobs. Yesterday, Angela Merkel, the Chancellor, indicated that she wanted emergency talks with President Obama to discuss the American car group’s decision, as German auto workers prepared to launch a strike across the country today.

Talks between General Motors and Lord Mandelson are expected to start next week once the American manufacturer delivers its revised UK business plan.

In a conference call yesterday, General Motors confirmed Germany’s worst fears that the American group would revert to its original plans, which would impose savage cost cuts to its Opel operations in Germany, although there would be some modifications to take into account a modest recovery in the European car market.

General Motors said that it still expects 10,000 jobs to go across GM Europe, representing a 30 per cent reduction. Yesterday it said: “There is very little difference to our plans and the Magna proposal.” Under the Magna scheme, there would have been no compulsory redundancies at Vauxhall, which employs 4,500 workers in Britain at Ellesmere Port in Cheshire and at Luton.

Magna had said that it planned to cut about 10,500 Opel jobs in Europe, with 4,500 in Germany, but added that it would keep four German plants open.

GM Europe, which employs 54,000 workers and sells Opel and Vauxhall cars, also markets brands including Cadillac and Chevrolet in Europe.

Tony Woodley, joint general secretary of Unite — Britain’s biggest union — told The Times: “GM’s decision was the one they originally wanted to make but had been concerned they would lose GM and government support. The decision is, without doubt, the best decision for GM, which maintains its European business, its intellectual property and access to growing markets, such as Russia.

“It is also good for Britain and British workers. There will inevitably be job losses, but in the last 20 years, General Motors has never imposed on the UK compulsory redundancies and we have no reason to think that that position will change. When people walk down the plank with dignity and with a package — we have no problem with that.”

GM said yesterday that it would present plans to European governments and unions in the near future and it hoped that it could wrap up all negotiations by the first quarter of next year.

Lord Mandelson also spoke to Rainer Brüderle, the new German Economy Minister, yesterday. Berlin is livid that the American car giant scrapped the sale of its European business, which comprises Vauxhall and Opel, after a six-hour board meeting in Michigan on Tuesday evening.

A deal to sell GM Europe to Magna International had been only days away from completion and would have protected about 80 per cent of Germany’s Opel workers.

Mrs Merkel had sought to encourage the Magna deal by offering a €1.5 billion (£1.3 billion) bridging loan and $4.5 billion of state aid once the deal had been completed.

Yesterday, Germany demanded the return of the €1.5 billion loan, which had been due to expire this month.

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