Car giant General Motors has filed for bankruptcy protection from its creditors, representing the biggest failure of an industrial company in US history.

The company has floundered in recent years after sales nosedived, but the credit crunch has exacerbated the situation to such an extent the company has been forced to file a Chapter 11 petition, ring-fencing itself from creditors. The US government is now expected to take a 60% stake in the company, bankrolling it to the tune of $30bn (£18.5bn) , while a sweeping restructuring takes place.

GM will move forward with four core brands — Chevrolet, Cadillac, Buick and GMC — and cut four others. The company plans to shed 21,000 staff, about 34 percent of its workforce.

GM has already been gifted $20bn of state aid since the end of last year, but its bankruptcy filing revealed its debts of $173bn dwarfed the handout.