Ruesselsheim  - General Motors (GM) denied rumours on Thursday that a consortium led by Magna had emerged victorious in the bidding war for GM's European subsidiary Opel.

"That's not the case," GM's chief negotiator John Smith wrote in a blog, in response to the suggestion that Magna had been selected.

Nevertheless, news that the heads of GM and Magna are to meet on Friday, reported by German daily Frankfurter Allgemeine Zeitung (FAZ), was seen as a good sign for the Austrian-Canadian car parts manufacturer.

Magna, backed by Russian state-owned Sberbank, is competing with Belgium-based investors RHJ International (RHJI) for a majority stake in Opel, which includes British brand Vauxhall.

"We have had constructive meetings with both Magna and RHJI this week," Smith blogged on a GM website, adding that more time had been spent in discussion with Magna since their proposal was more complex.

In particular, Smith said, Russian involvement in the Magna bid gave rise to issues, "including NewOpel involvement with Chevrolet in Russia" and "intellectual property transfer rights in Russia."

In total, Smith said they had started the week with about 30 problems relating to Magna's bid, of which a third had been resolved.

However he warned, in reference to Magna's Russian partner that, "the difficulties of getting to 'yes' with three parties in the room were very much in evidence."

Smith said the RHJI bid, "is both simpler and requiring less government-backed funding compared to Magna/Sberbank."

GM chief executive Frederick Henderson and the head of Magna, Siegfried Wolf, were due to discuss outstanding issues at GM's Detroit headquarters, FAZ reported, drawing on sources at Magna and in the four German states where Opel has factories.

"The meeting is fundamentally a good sign for Magna," said a person close to the negotiations. The reason for the meeting was said to be a new GM demand to keep a minimal 20-per-cent stake in Opel.

The US car giant currently retains 35 per cent of its European subsidiary. A source close to Magna confirmed to the German Press Agency dpa that Magna and GM were narrowing their differences.

In an attempt to dispel concerns about Opel patents, Magna has offered to give GM a veto right in case Opel shares and patents are sold to a third party in the future, the source said.

German unions and the governments of all four German states where Opel has factories, have openly endorsed Magna's bid, while GM is thought to prefer RHJI's proposal, leaving open the possibility of a future Opel buyback.(dpa)