President Obama said that the move would stop the company being broken up, as it prepared to make the world’s largest industrial bankruptcy filing.

The United Auto Workers (UAW) union will take 17.5 per cent in shares and the governments of Canada and Ontario will lend $9.5 billion (£5.9 billion) and get 12 per cent equity and $1.7 billion debt in return.

The US Government will provide an additional $30 billion in financing to get the giant through bankruptcy.

“We intend for this to be a permanent resolution of the GM situation,” an official said early this morning, emphasising that there would be no further taxpayer cash. This is it for GM on a go-forward basis.”

GM will close 11 facilities and idle a further three. The US Government expects GM to be out of bankruptcy in 30 to 60 days.

The UAW will be able to put in one independent director, as will Canada and Ontario, but Obama Administration officials said that they expected a significant clear-out of the existing GM board by the time the company emerged from bankruptcy.

Mr Obama is expected to emphasise today that the Government will take a backseat, “hands-off” role on everything but corporate governance issues.

No government employee will serve on the board or work at the company and the Administration plans to offload its stake “as soon as practicable”.

An official said: “Our goal is to promote strong and viable companies that can quickly be profitable and contribute to economic growth and jobs without goverment involvement.”

The path to a bankruptcy was cleared when 55 per cent of GM’s unsecured creditors agreed at the weekend to accept equity of up to 25 per cent in a restructured group in return for giving up $27.2 billion of debt.

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