A DRAMATIC decision by US car giant General Motors not to sell its European business has been welcomed in Britain.

Unions are now preparing for a fresh round of negotiations to secure the future of thousands of Vauxhall car workers' jobs, following the unexpected u-turn.

The General Motors board decided after meeting in Detroit to scrap plans to sell its Opel and Vauxhall brands to Canadian car parts firm Magna - a deal which threatened thousands of jobs.

President and chief executive Fritz Henderson said the decision to keep Vauxhall followed a more benign business environment in Europe and GM's improved financial health.

The decision was greeted with optimism by the 5,500 workers employed by Vauxhall in the UK, but sparked anger in Germany.

Analysts predicted that two German plants could now close, with the loss of thousands of jobs.

Workers across Europe were concerned that Magna's takeover would give an unfair advantage to Opel's vast workforce in Germany, as the German Government was willing to give loans worth £4bn.

German workers will begin walk-outs from tomorrow, while the German Government denounced the car giant's behaviour as 'totally unacceptable'.

Business Secretary Lord Mandelson said: "I am keen for very early discussions with GM over their plans and how they will affect British plants and workers.

"I have always said that if the right long-term sustainable solution is identified, then the Government would support it."

Workers at Vauxhall's Ellesmere Port plant in Merseyside - where 2,200 workers are employed - were buoyant and optimistic as they streamed out of the turnstiles yesterday.

Unite joint general secretary, Tony Woodley, who used to work at Vauxhall's Ellesmere Port plant, said: " It is fantastic news for the UK and right that GM does not break up its family and instead retains ownership of Vauxhall."