A consortium headed by Magna is on track to buy  Opel, a senior German politician said on Tuesday.

"There is not the slightest reason to assume why it should not come to an agreement between GM and Magna," Hesse state premier Roland Koch told Reuters at Opel's headquarters near Frankfurt.

Koch said Fiat had no real chance of a deal.

"Fiat's entry would have raised more questions than it answered. There was not a second of due diligence for Fiat," he said.

Koch said Magna and GM were still negotiating details of the accord - including the future of GM's Russian plants - so that a memorandum of understanding could  be turned into a binding contract.

"We cannot yell hooray yet, there is a lot of work ahead of us. I think a few storms will pass our way but we will also see sunshine," Opel chief executive Hans Demant told the news agency.

Koch said Magna would invest EUR500m in Opel, of which around EUR100m was due when the contract was signed. The last tranche is due in 2012.