Europe's ailing car industry glimpsed hope in green vehicles yesterday as Brussels edged towards approval of state aid for clean engines and a German solar power group made a surprise move for Opel.

SolarWorld's €1billion (£839 million) offer for General Motors' German division stunned analysts, who mostly judged it to be implausible. However, it was timed as European Union sources suggested that the industry would be allowed to call on government support in return for commitments to reduce pollution.

Catching what appears to be the prevailing mood in the European Commission, SolarWorld promised to create the “first green European automotive group” with the acquisition of Opel. The company offered €250million in cash and €750million in bank credits for Opel's four car factories and a research centre in Rüsselsheim, western Germany.

Frank Asbeck, SolarWorld's chairman, said: “The group has already been working for some years on the development and testing of electric drive vehicles that are propelled by solar energy and that even participate successfully in motor racing.”

SolarWorld demanded that the German manufacturer be spun off from GM to put an end to a 79-year-old alliance. It also asked for compensation of €40,000 per worker from German and European authorities, which would almost equal the acquisition price.

The offer was rejected by GM, which said that Opel was not for sale, and by Opel, which said that it wanted to retain the transatlantic link. Analysts also raised doubts about SolarWorld's capacity to finance the deal and about its ability to move from solar panels to cars. Summing up widespread scepticism, Robert Schramm, an analyst at Commerzbank, said: “I checked to see if today is April 1.”

But with GM losing $20 billion (£13.3 billion) in the first nine months of this year, and seeking billions of dollars of help from Washington, analysts said that Opel may end up seeking a white knight investor. Amid fears that the German manufacturer could be dragged down if its owner is forced to file for bankruptcy next year, Angela Merkel, the German Chancellor, appears willing to approve a €1 billion loan guarantee for Opel before Christmas.

European Commission officials have also suggested they will give the green light to a German government rescue package.

Günter Verheugen, Europe's Industry Commissioner, gave a strong hint that competition laws would be waived for Opel, saying yesterday that exceptional circumstances justified “exceptional measures”.

Mr Verheugen also indicated that the EU was likely to accept demands by European car manufacturers for state help. After new car registrations fell by 15.5 per cent in October to just over one million, the industry demanded €40 billion in soft loans to see it through the crisis.

In France, where Renault has cut production by 20 per cent and Peugeot by 30 per cent, President Sarkozy is willing to back the call. But the European Commission is split, with Neelie Kroes, the Competition Commissioner, hostile to special treatment for the car industry, which she said was unlike the financial sector. Commission sources said that a compromise will be thrashed out involving approval of state help for manufacturers who turn to cleaner vehicles.

Jean-Pierre Jouyet, France's European Affairs Minister, urged “targeted and temporary measures to enable the sector to improve technological and ecological performances”.

The details of the EU green scheme are likely to be released officially next week.

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