There was barely concealed fury in the German capital yesterday after news of General Motors’ U-turn on its European division was revealed. Its first reaction was to ask for its money back: the Germans had put up a bridging loan of up to €1.5 billion (£1.3 billion) to keep Opel plants going while a deal was hammered out.

On Tuesday night, while Angela Merkel, the German Chancellor, was flying back from a trip to Washington, GM confirmed that it would pay back the money. But that was not enough to head off anger in Berlin.

After four months of negotiations this year, Mrs Merkel had boxed through a deal with Magna International, the Canadian group, and Sberbank, its Russian partner, to keep Opel plants alive in Germany. It was a trump card that won her crucial votes in September’s general election — a sign to voters that she was ready to rustle up state aid to save German jobs.

Now that deal has fallen apart and Ms Merkel, just back from a well-received speech to the US Congress, is not the only person to have been wrong-footed. Vladimir Putin, the Russian Prime Minister, who had hoped to modernise Russia’s car industry with Opel’s help, expressed his surprise. Meanwhile, German union leaders who had sold the Magna deal as a job-saver, were calling for huge demonstrations to be staged on Thursday. This week, Opel workers had agreed to go without any wage increase this year to help the Magna deal along; now they feel betrayed.

Rainer Brüderle, the newly minted Economy Minister, called the GM shift “unacceptable”. It was understood that GM would require €3 billion of state support to carry out radical restructuring of its European division, but Mr Brüderle declared: “We won’t let ourselves be pressured by General Motors.”

German regional premiers where Opel’s four factories are based were livid, none more so than Jürgen Rüttgers of North Rhine Westphalia, who faces elections early next year. The Bochum Opel plant, saved under the Magna plan, is in his region and could well be axed by GM. “This shows the ugly face of turbocapitalism,” said Mr Ruettgers, who in spite of his rhetoric is a conservative ally of Ms Merkel.

The official word from the Government was that it “regretted” the decision. “A process of securing an investor — a process that spread over six intensive months, involving all players, including GM — has been broken off,” Ulrich Wilhem, a government spokesman, said. The Magna and Sberbank deal was supported, he said, by “a convincing industrial logic”.

The collapse of the Magna deal is becoming the first political test of the new Merkel Government of Christian Democrats and Free Democrats. Before the election, many Free Democrats had argued in favour of Opel going into insolvency.

Ms Merkel ignored them and over-ruled her Economics Minister, who was Karl-Theodor zu Guttenberg. She even dismissed the reservations voiced by two government representatives on the Opel trust board. The deal with Magna was duly struck before the election and hailed as a triumph for her negotiating skills.

But Ms Merkel had not covered all the bases. With British and Spanish workers feeling that they had been stitched up by the Germans, the Magna deal was submitted to the European Commission to determine if European competition rules had been violated. That bought GM time to rethink its position. Good sales figures and a fear that Opel-GM technology could end up in Russian hands, creating a new European rival, persuaded GM to change its position.

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