Britain will help underwrite the planned takeover of the European arm of General Motors, possibly in the form of loans, government business secretary Peter Mandelson said during a van plant visit on Friday.

Mandelson told Reuters at the Vauxhall plant in Luton he would take part in the Europe-wide rescue plan provided terms were right.

"I'm not going to discuss the detail of any financial underwriting, but it may involve loans or loan guarantees," he was quoted as saying.

"We would obviously have to have interest paid and some security (for the loans). This is taxpayers' money we are dealing with and a lot of it," he said.

GM Europe which owns the Opel and Vauxhall brand, is currently in talks to be taken over by parts maker Magna with other bids, including a new one from China, waiting in the wings.

Any takeover is expected to be helped by an estimated EUR3bn (US$4.2bn) in European state guarantees, the news agency noted.