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Germany has delayed a decision on providing state-backed bridge financing to General Motors Corp.'s (GM) Adam Opel GmbH unit because the U.S. parent company has surprisingly come up with new cash demand, German government officials said early Thursday.

A decision over Opel has been delayed to Friday, Economics Minister Karl-Theodor zu Guttenberg told reporters after late night negotiations in Berlin that dragged on into the early hours of Thursday.

Finance Minister Peer Steinbrueck said GM surprisingly presented a new cash demand of EUR300 million, which the federal government is unwilling to meet. He added that the exact purpose for any German state aid has to be transparent. "This wasn't the case...We can't accept that, because we need security," he said. Steinbrueck said, however, that there is "reasonable hope" that a decision on bridge financing for Opel could be made Friday.

Steinbrueck also said that Austrian-Canadian Magna International Inc. (MGA) and Italian auto maker Fiat SpA (F.MI) are still in the race for Opel, while financial investor Ripplewood isn't anymore.

Chancellor Angela Merkel met with key cabinet ministers, governors of the German states with Opel plants, representatives from parent GM and the U.S. Treasury, as well as executives from three bidders for Opel.

Steinbrueck voiced disappointment over how very little information was being provided by the U.S. Treasury, which Guttenberg described as "marginal, to put it politely".

The meeting was overshadowed by a rift between the ruling coalition parties, with the Social Democrats appearing to be ready to bail out Opel at any cost to safeguard jobs. Zu Guttenberg, however, early Thursday insisted that an orderly insolvency remains an option as a final resort.

The German government has been under pressure to make a decision as it sought to avoid Opel getting embroiled in GM's looming insolvency proceedings in the U.S. and risking large-scale job losses at a time when Europe's largest economy is gearing up for federal elections in September.

Magna, seen as the front runner for a deal, has teamed up with Russian auto maker OAO GAZ Group (GAZA.RS) and state-controlled OAO Sberbank (SBER.RS). The Russian partners have provided little detail so far about their plans for Opel. They do, however, have prominent support as a German government spokesman confirmed that Merkel has discussed the bid for Opel with Russian Prime Minister Vladimir Putin during a phone call last weekend.

Magna founder and chairman Frank Stronach said in Berlin he was upbeat about Opel's potential, adding that Magna would be willing to help finance GM's extra cash demand. "But if we sign the contract and (GM) breaches it, we would expect the German government to support us...in getting the money back," Stronach said.

"Opel has always been somewhat restricted, because they weren't free," he told reporters on the sidelines of the meeting. Stronach said he believes Magna "could run Opel as a world brand".

According to previous statements, Magna's consortium plans an initial investment around EUR700 million. Under the plan, which is backed by Opel's works council, GM would retain a 35% stake in the company. Sberbank would take a 35% stake as well, with Magna holding 20% and Opel's employees with 10%.

But some analysts have voiced concerns over the mid- and long-term prospects of the planned tie-up as both Magna and GAZ have been battered by collapsing demand in global auto markets amid the economic downturn.

GAZ is controlled by Basic Element, the investment holding of embattled Russian billionaire Oleg Deripaska. Debt-ridden Deripaska, who also controls aluminum giant UC Rusal, recently lost his 20% stake in Magna to creditors. But both sides said at the time that they would remain partners.

Magna itself swung to a loss of $200 million in the first quarter from earnings of $207 million a year earlier as sales tumbled 46% to $3.6 billion. GM is Magna's largest customer and Chrysler LLC is its fourth largest.

Italian auto maker Fiat SpA (F.MI) has launched a rival offer, but Chief Executive Sergio Marchionne didn't attend the press briefing following the meeting.

On Tuesday, Chinese auto maker Beijing Automotive Industry Corp. emerged as a possible bidder. Economics Minister zu Guttenberg confirmed that he received a letter of intent from the Chinese investor, but added that BAIC wasn't part of the negotiations in Berlin.

Although a decision to sell Opel and its U.K. sister brand Vauxhall, the core of GM's European division, will still have to be made in the U.S., the German government's support is crucial for the brands' prospects as the bids are based on billions of euros in financial guarantees from the state.

Germany's federal government and the states of Hesse, North Rhine-Westphalia, Thuringia and Rhineland Palatinate, which are home to Opel plants, were expected to decide on the bridge financing for Opel late Wednesday or early Thursday to keep it operating even if GM files for insolvency. The interim financing of around EUR1.5 billion would be from state-owned bank KfW Bankengruppe and regional banks of the states with Opel plants, according to previous statements.

Company Web site: www.opel.com

-By Christoph Rauwald and Andrea Thomas, Dow Jones Newswires; +49 30 2888 4126; christoph.rauwald@dowjones.com; andrea.thomas@dowjones.com