FRANKFURT/BERLIN - German politicians seethed and unions tore up a deal to cut costs in protest at General Motors' "completely unacceptable" decision not to sell Opel, its European unit, after months of painstaking talks.

Labor leader Klaus Franz rescinded hundreds of millions of euros in cost concessions that workers agreed to on condition that Opel was bought by Magna, the Canadian group the Berlin government had long favored as buyer.

"General Motors' behavior toward workers is completely unacceptable," German Economy Minister Rainer Bruederle told reporters the morning after GM's shock news. "General Motors' behavior toward Germany is completely unacceptable."

Germany viewed Magna and its Russian partner Sberbank as most likely to preserve as many German jobs and plants as possible.

Half of Opel's 50,000 staff are based in Germany.

"General Motors' behavior shows the ugly face of turbo-capitalism. That is completely unacceptable," said Juergen Ruettgers, premier of the state of North Rhine-Westphalia, home to Opel's Bochum plant, which is seen at risk of closure.

GM Europe will now revert to a reorganization plan that envisions chopping fixed costs at Opel by 30 per cent, a spokeswoman said.

"Failure to reach the needed restructuring would result in the operation becoming insolvent, an unnecessary and undesirable outcome for all involved," GM Europe said.

She declined to say what that could mean in terms of job losses and plant closures, but German staff feared the worst.

"I don't know what is going to happen here in Bochum if Magna does not take it over," said one Opel worker arriving for an early shift at the plant.

Another Opel worker accused GM of betraying its workers.

"This arises from the mentality of American capitalism. They used to make treaties with the Indians and then quickly break them," he told a German radio interviewer.

In Spain, union spokesman Jose Juan Arceiz said workers would try to negotiate a deal with GM as they had with Magna.

GM abandoned the Opel sale on Tuesday, saying improving business conditions and the strategic importance of Opel had prompted the move by its board of directors.

GM said it expected that restructuring Opel on its own would cost about 3 billion euros, costs expected to cover job cuts and plant closures.

Labor leader Franz said workers would not go along with GM's "blackmail" of European governments and staff.

The GM board decision to keep Opel came after European Union officials challenged the terms of the funding Germany had pledged to support the sale of Opel to Magna.

Germany had promised 4.5 billion euros in aid to help close the Magna deal, which was widely seen as the option most likely to preserve Opel jobs.

But EU officials said GM needed to confirm that it would have agreed to sell Opel if Germany had made clear that the same funding would have been available to any buyer.

GM's board had opted to sell a 55 per cent stake in the loss-making Opel unit to Canadian group Magna and its partner Sberbank after the seven months of talks, which had included a competing bid from Brussels-listed RHJ International.

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