GM’s decision to withdraw all loan guarantee applications for its Opel/Vauxhall operations in Europe has been welcomed by the UK government.

The British administration had agreed to provide EUR330m (US$408m) in guarantees to Vauxhall, while the Spanish government had also indicated it could offer a similar amount.

However, last week’s decision by Germany to refuse EUR1.3bn in loan guarantees to Opel seems to have triggered the move by GM to unilaterally pull its request to European governments that could have seen up to EUR1.8bn provided.

“We are pleased that, after a very difficult period, GM is now in a position to fund the restructuring of GM Europe, including Vauxhall, from its internal resources” said a statement from the UK Department of Business, Innovation and Skills.” We look forward to working with them going forward.”

GM will now provide all funds internally for Opel’s restructuring, which will see the automaker cut capacity by 20% and shut its Belgian site in Antwerp.

There had also been some discussions with the German Länder [regional states] and the European Investment Bank but these appear to have been shelved.

“We had been given assurances very recently the UK and Spanish governments were intending to support us,” said Opel CEO Nick Reilly. “There was no withdrawal of support [from them].”

Reilly added the move not to ask the UK government for support would not affect production of the next generation Vivaro medium van in tandem with Renault, although the formal signing of that deal would not be until July or August this year. “We will have funding for that,” he said.

The Opel boss also sought to allay widespread fears – particularly in Germany – that GM might consider shuttering other plants now the loan guarantees had been withdrawn.

“We have a signed agreement with Bochum together with all the plants around Europe and we are not intending to change that,” he said.

Reilly also played down suggestions he had been let down by the German government although it is clear a clash of views within the Berlin coalition did not smooth Opel’s path.

“The German government has taken its decision for its own reasons,” he said. “We intend to keep being a strong investor in Germany.

“Clearly we were disappointed at the time, but I would not say let down is the right word.”