Image caption Opel was a sign of German industrial success despite being US-owned

German Economy Minister Rainer Bruederle has rejected a request for state aid by carmaker General Motors for its European division Opel.

Opel, which owns the UK Vauxhall unit, wanted loan guarantees of more than 1bn euros (£900m) from Germany.

GM asked for the guarantees to help it raise money to restructure Opel.

Some German politicians were unhappy that GM was asking for aid, despite having paid off loans it received from the US government.

'Very disappointed'

A German committee that considers requests for aid from companies hit during the recession met to consider Opel on Wednesday, but failed to reach a decision.

This put the matter back into the hands of Mr Bruederle, who announced: "I am confident that Opel has a good future without credit guarantees."

Opel's chief executive Nick Reilly said that he did not "particularly understand the reasons why" the aid was rejected.

"GM is naturally very disappointed, as is Opel, with this decision after such a very long process, and we have spent a lot of time answering many, many hundreds of questions, being reviewed by many committees," he said.

GM emerged from bankruptcy protection last July, and in May this year reported its first quarterly profit in nearly three years.

The company also repaid $8.1bn in loans it had received from the US and Canadian governments.

'Review options'

Opel employs some 24,000 people in Germany, where it assembles Insignias, Astras and Corsas at four plants.

On Thursday, German Chancellor Angela Merkel was due to meet with the leaders of the states that host Opel plants, and there was speculation that the guarantees may yet be provided from other government departments.

GM has said it will spend about 1.9bn euros on restructuring Opel, but is seeking 1.8bn euros in loan guarantees from European governments, including the 1.1bn euros from Germany.

The aid request from GM has not been helped by Germany taking a lead in promising bail-out money to struggling eurozone countries - a position which led to a fall in Mrs Merkel's popularity ratings.

GM's Mr Reilly said the firm would "review all our options for funding".

"The UK government and the Spanish government have both signalled they are willing to give guarantees so that we will have access to capital markets."