Berlin - The German Government confirmed Thursday that it had held talks with tyre maker Continental AG and its new owner ball- bearing maker Schaeffler Group over possible state aid to help the giant car parts groups through the global economic crisis.

"The talks were constructive," German Technology and Economics Minister Michael Glos said.

The two companies having a combined debt of about 22 billion euros (29 billion dollars).

This could result in the federal government taking out a holding worth between 3 billion and 4 billion euros in Continental, with the bid for state help representing the latest twist in the takeover of Hanover-based Continental, which Schaeffler launched last year.

This resulted in privately owned Schaeffler gaining 49.9-per-cent voting rights in Continental.

But since Schaeffler launched its bid for Continental, the car industry has been plunged into a crisis as global sales have slumped in the wake of the world economic slowdown, which has made it difficult for the two companies to meet their interest-rate payments.

In the meantime, Schaeffler, which is owned by billionaire Maria- Elisabeth Schaeffler and her son Georg, is hoping to secure credit and state-based guarantees to ease its debt problems.

At their talks, which also included state government representatives Wednesday, Continental and Schaeffler agreed to present in the next few weeks a new corporate strategy before continuing the discussions on state assistance. (dpa)