General Motors said that it plans to cut about 10,000 jobs at Opel, its European division, after last night’s surprise announcement that it would retain control of the unit.

As German unions confirmed that they will back a walkout over the scrapping of the sale, John Smith, GM's vice president, said the US carmaker wants to cut costs by 30 per cent at the European unit, which employs more than 50,000 people.

It was unclear how many of these jobs cuts, if any, would be in the UK.

Unions in Germany, where Opel employs 25,000 workers, announced plans earlier today to strike in protest at the decision to scrap the deal to sell the unit to Magna International, the Canadian car-parts maker. Klaus Franz, Opel's top employee representative, called it a "black day" while IG Metall, the industrial union, said workers at Opel's four German plants would stop work tomorrow with similar moves likely to follow on Friday at other European Opel plants.

German unions also warned GM against expecting any help on its restructuring plans. "We won't help shape the way back to General Motors. Instead we will take up our classic function of defending the workers," Mr Franz said. Opel's employee council had agreed only yesterday to offer cost-cutting contributions worth $265 million a year. German workers had agreed to forgo pay increases during 2011 and relinquish part of their traditional Christmas and summer bonuses.

Germany, which had been lobbying for Magna and its Russian partner Sberbank to buy the operations to preserve German jobs, today branded GM's decision as "totally unacceptable" and demanded details of the US carmaker's plans for the business.

It is understood that Angela Merkel, Germany's Chancellor, will discuss the matter with the cabinet today. Jürgen Reinholz, economy minister of Thuringia, one of the states where Opel has a plant, said GM had signalled it would repay a €1.5 billion German bridging loan for Opel by the end of the month.

Lord Mandelson, the Business Secretary. said that he was keen for "very early discussions with GM over their plans for the business and how they will affect British plants and workers." He added: "I have always said that if the right long-term sustainable solution is identified then the Government would be willing to support this."

Unlike their German counterparts, British unions expressed delight at the decision to stop the sale, which had threatened 5,500 jobs at Vauxhall's Ellesmere Port and Luton plants.

Though a plan had been agreed that would have saved more workers than had been initially expected, unions were sceptical about the Magna deal.

Tony Woodley, joint leader of Unite, the union, said the decision was "fantastic", adding: "There is no logic in breaking up the company. I believe it is the right decision for Britain and our plants." He called on Lord Mandelson to demand that GM give guarantees about future production.

Explaining its decision, GM said that Europe's business environment and its overall health had both improved since it put the division up for sale and that a restructuring plan was now the better option.

Russia shared Germany's consternation over GM’s U-turn. A spokesman for Vladimir Putin, the Russian Prime Minister, said that Magna and Sberbank planned to conduct a "deep legal analysis of the situation."

However, sources close to Magna said that, despite the months spent on the bid, which was in its advanced stages, the group was unlikely to take legal action as GM is one of its biggest customers.

Magna and Sberbank had been working since May on their plans to acquire a 55 per cent stake in GM's European business after the American car giant went into bankruptcy protection. But last night GM abandoned the planned sale in favour of a restructuring of the business.

The board of GM is understood to have become anxious that a sale could see the two car brands competing against their former parent in high-growth markets such as Russia.

Mr Putin's spokesman said: "The decision by General Motors arouses surprise in Russia. According to our information the Magna-Sberbank consortium is intending to carry out discussions with General Motors very soon and carry out a deep legal analysis of the situation."

The Russian Government has repeatedly said that the sale of Opel to a Russian-backed group would show the readiness of President Obama to boost economic ties with Russia.

It is unclear whether GM will be forced to pay a break fee to the Magna/Sberbank consortium after terminating the deal.

In a statement last night, Siegfried Wolf, Magna's joint chief executive, said: "We understand that the board concluded that it was in GM's best interests to retain Opel." It added that it will "continue to support Opel and GM in the challenges ahead."

Germany had looked to be the winner from the Magna deal, which had secured the future of four Opel plants in the country. However, negotiations by Mrs Merkel had caused controversy. Concerns were raised over her offer of €4.5 billion (£4.02 billion) in financial aid in return for the Magna deal.

Lord Mandelson was among those who had complained to the European Commission, warning it not to accept anything that looked like a "political fix or any linkage between aid and retention of jobs in any specific plant or country."

Joelle Milquet, vice-premier of Belgium, where a big Opel factory was to be closed, had also criticised the deal saying: "I think the German Government sought its own advantage."

The Commission, which has powers to claw back aid that does not comply with strict European state aid rules, was examining the deal.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive