GENERAL MOTORS (GM) is set to file for bankruptcy on Monday in a deal that will see Barack Obama&rsquo;s US government own 72.5 per cent of the ailing car-maker.<br /><br />The way forward was cleared yesterday after dissident bondholders agreed to a deal that will give them 10 per cent of GM once it has emerged from bankruptcy with an option to buy more.<br /><br />GM had been given a 1 June deadline by the US administration to cut debts, which include $20bn (&pound;12.5bn) owed to the United Auto Workers (UAW) union&rsquo;s healthcare fund, and $27.2bn owed to bondholders.<br /><br />The deal, which has support from creditors representing around 20 per cent of GM&rsquo;s debt, comes after bondholders rejected a $27.2bn debt-for-equity deal earlier this week.<br /><br />&nbsp;As part of yesterday&rsquo;s agreement, bondholders must agree not to oppose a move to sell GM&rsquo;s assets off to a new, government-funded company in a fast-track bankruptcy.<br /><br />It is hoped the new agreement will help the carmaker make a speedy exit from bankruptcy, in between 60 to 90 days. The new firm will have around $17bn of debt, down from the $58bn it has now. One analyst said: &ldquo;It will be very painful but hopefully very quick.&rdquo;<br /><br />Bankruptcy, followed by government ownership, is a major fall from grace for GM, which was once the world&rsquo;s largest company and has for decades been seen as a bellwether of the US economy<br /><br />Meanwhile in the UK, fears mounted over the future of thousands of Vauxhall jobs, after talks for a buyer for GM Europe broke down.<br /><br />A deal was expected yesterday to name a buyer for GM&rsquo;s European branch, which comprises Vauxhall and Opel.<br /><br />But all-night talks between GM, GM Europe and German chancellor Angela Merkel were halted when Berlin demanded more &ldquo;seriousness&rdquo; from the carmaker.<br /><br />Tensions were further heightened when GM asked for an extra &euro;300m (&pound;262m) on top of the &euro;1.5bn it has already asked Germany for. Just two buyers remain in the runnings to buy GM Europe: Canadian car part maker Magna, and Italy&rsquo;s Fiat.<br /><br />In an election year for Germany, Berlin is making billions of euros of loan guarantees to the buyer. Fears are growing that German jobs will be prioritised over UK jobs, as GM Europe is headquartered in Germany.<br /><br />Business secretary Lord Mandelson has said the government is doing everything it can to stop job cuts. He added he&rsquo;d received &ldquo;categorical&rdquo; assurances that Vauxhall production would stay in the UK, but conceded that some jobs would be lost.<br /><br />Union bosses slammed the minister, saying he was &ldquo;not doing enough&rdquo;.