Brussels has warned General Motors that it would not tolerate a “subsidy race” between European Union member states competing to offer the American carmaker generous state aid in return for keeping open its factories in their territories.

In a strongly worded statement, Günter Verheugen, the European Commission’s Vice-President and Commissioner for Enterprise and Industry, Neelie Kroes, the Competition Commissioner, and Vladimir Spidla, the Employment Commissioner, said that pitting member states against each other in such a way risked fragmenting the single market.

Their comments came after a meeting today in Brussels with Nick Reilly, head of GM’s European operations, which employ 50,000 people. Ministers from Britain, Germany, Spain, Belgium, Sweden and Poland, all of which have GM plants, also attended.

GM is seeking €3.3 billion (£3 billion) in state aid to help it to restructure its European operations. This month the company reversed a decision to sell Opel and Vauxhall, its European marques, to Magna, a Canadian car parts supplier, and Sberbank, its Russian partner. That deal, involving €4.5 billion of restructuring funds from Germany, prompted concerns that countries offering bigger subsidies could escape plant closures.

After the meeting, Jochen Homann, a German Economy Minister, said that there had been a commitment from all countries not to make any promises of aid before GM put forward its restructuring plan for Opel and Vauxhall, which is expected by the end of the week.

Mr Reilly said that it would be “quite difficult” for GM to supply much of the €3.3 billion funding itself because it must also bear restructuring costs in the United States and elsewhere. He said that GM would not be influenced in deciding where to cut jobs by how much money each government might offer because “the plan that we have is already in existence”. He refused to give details of the plan, which is thought will cut up to 25 per cent of the company’s car-making capacity, leading in turn to 10,000 job losses. “People at the plants will be the first to hear it,” he said.

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