GM's reorganisation plan has been challenged by some bondholders, dealerships and labour unions that hoped for a better deal through liquidation. But all have so far been blocked by Judge Gerber, who warned Sunday that GM's collapse would be a 'disastrous result' for the entire auto community.

Once the world's largest carmaker, GM will emerge from the bankruptcy process a much smaller company. The Detroit manufacturer will leave behind a series of brands that are being sold off or liquidated, including Pontiac, Saturn, Hummer, Opel and Saab.

The Obama administration meanwhile was also mulling what kind of pension to give ousted GM chief executive Rick Wagoner, who was forced out in March as part of the government's massive bail-out of the troubled manufacturer.

Wagoner is retained on a nominal $1-a-year salary, but now Washington must decide what sort of exit package to offer the 56-year-old former boss.

Some media reports have put the figure Wagoner is contractually entitled to at up to $20 million, making it a tricky political decision for an administration hit by a public outcry at handouts of taxpayers' dollars.

No decision has yet been made on his package, according to Treasury officials. Obama has in the past expressed outrage over bonuses and excessive payments to the managers of failing businesses in the current economic crisis.