FILE PHOTO: The logo of Opel and the bank of French car maker Peugeot are seen at a Opel and Peugeot dealership in Leverkusen, Germany, October 22, 2012. REUTERS/Wolfgang Rattay/File Photo

LONDON (Reuters) - The pensions deficit at General Motors' GM.N British division stands at up to 1 billion pounds ($1.25 billion), a source told Reuters on Monday, amid fears over the future of its Vauxhall plants as Peugeot PEUP.PA explores a European buyout.

Peugeot is considering taking over GM’s European divisions Vauxhall and Opel, prompting concerns among British trade unions over the future of GM’s British plants following reports the French carmaker has pledged to continue production at all four German sites.

Many multinational companies, including Tata Steel recently, have had to deal with increased pension spending and it could be a factor which influences Peugeot in where to make any possible cuts following a deal being reached.