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The ailing carmaker General Motors has proposed handing a controlling stake of more than 50% to the US government as it struggles to reach a deal with its lenders to avert imminent bankruptcy.The nationalisation, in effect, of the biggest US motor manufacturer would be part of a huge debt-for-equity swap as GM tries to shed $44bn (£30bn) of $62bn in crippling liabilities owed to the government, trade unions and bondholders.

But the plan was condemned last night as "neither reasonable nor adequate", by bondholders who would get only 10% of the company, forcing them to write off billions of dollars. Existing shareholders would be left with only 1%.

With its future on a knife-edge, GM delivered a blunt warning that unless its creditors accepted the plan, it would declare bankruptcy and leave the courts to carve up the company. Fritz Henderson, the chief executive, told a press conference at the company's headquarters: "If this cannot be accomplished out of court, we'll go into court and restructure GM under bankruptcy if it's necessary."

US President Barack Obama has announced tough targets for new fuel-efficient vehicles in order to cut pollution and lower dependence on oil imports.Describing the move as "historic", Mr Obama said the country's first-ever national standards would reduce vehicle emissions by about a third by 2016.

Under the proposed standards, manufacturers would be required to begin improving fuel efficiency by 5% a year from 2012. By 2016, they would have to reach an average of 39 miles per US gallon for passenger cars, and 30 miles per gallon for light lorries.

The new targets would increase the average fuel efficiency of all US cars and light lorries to 35.5 miles per gallon, about 10 miles per gallon more than the current standard.