Chrysler has already received a $4bn US government loan.

General Motors (GM) and Chrysler are to get more loans from the US treasury as the troubled carmakers work on plans to try and make themselves viable.

The two Detroit, Michigan-based giants are seeking to stave off bankruptcy and GM will receive a further 60-day, $5bn loan while Chrysler is to get $500m.

The firms have already received a combined $17.4bn in aid since December.

Both face collapse as the economic downturn has prompted a slump in sales of vehicles worldwide.

The US government has demanded that both firms submit viable restructuring plans before it will consider further aid.

Both companies' restructuring plans were rejected at the end of March. This latest funding will bridge the gap until they have to present new reorganisation plans.

Bankruptcy prospect

Chrysler, which has already received about $4bn in government loans, has until 30 April to make further cuts and take on a partner or face liquidation.

It is in talks with Fiat but the boss of the Italian carmaker has threatened to walk away from an alliance if unions do not make concessions.

Meanwhile GM, which has been loaned $13.4bn before the latest tranche of cash, has until 1 June to complete its restructuring or face seeking bankruptcy protection.

The funding for the carmakers has come from the Troubled Asset Relief Program (Tarp), which has about $700bn aimed at stabilising the US financial system.