Fiat is seeking a $US3 billion payment from General Motors to cancel a put option that would let it sell its loss-making and indebted car business to GM, Reuters reported, citing trade newspaper Automotive News.

Citing sources at Fiat, the industry paper reportedly said General Motors had in turn offered $500 million to exit the put, whose validity it disputes.

Fiat declined to comment to Reuters on the report while officials from GM were not available for comment.

Reuters noted that GM officially set in motion on Thursday a process that aims to settle the dispute via direct negotiations between the two companies' chief executives, who must meet in person within 20 working days from December 16.

If they cannot reach an agreement within 10 working days after the meeting, either party can take the matter to court, the report added.

According to Reuters, Automotive News quoted one Fiat insider as saying Fiat also accuses GM of violating terms of a joint venture to develop engines and transmissions, but gave no details.

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