* Delphi bankruptcy lenders win out in auction

* Move supported by GM; Platinum Equity remains in talks

* Court OK for deal would end costly four-year bankruptcy

(Adds detail, statements from GM, Platinum, bylines)

A group of hedge funds that provided bankruptcy funding to Delphi Corp (DPHIQ.PK) on Monday won a high-stakes auction to take control of the auto parts supplier, scuttling a rival deal brokered by the Obama administration.

Delphi's board of directors and GM both offered their support for the proposed deal that would hand the company's assets over to its debtor-in-possession lenders in exchange for their forgiveness of nearly $3.5 billion in loans.

The result, announced by Delphi late Monday, came after a two-day auction in New York.

Delphi, GM and the White House-appointed autos task force had all previously backed a rival bid that would have given control of Delphi to private equity firm Platinum Equity.

A bankruptcy court hearing to review the results of the auction was scheduled for Wednesday.

Approval of the proposed deal would end a costly and long-running bankruptcy that contributed to GM's own collapse and became wrapped up in the effort by U.S. officials to restructure GM's operations with some $50 billion in aid.

Because the U.S. Treasury provided bankruptcy financing to GM, government officials had a dominant say in the shape of the new company that emerged from bankruptcy earlier this month.

But the government has had little direct influence in the end game for Delphi, which remains a crucial parts supplier to GM with the power to shut down its assembly plants.

GM, which would have provided $2 billion in cash and credit under the now-rejected Platinum deal, said the transfer of Delphi's assets to its bankruptcy lenders would provide GM with better terms as well.

GM supports this bid, which is still subject to Delphi bankruptcy court approval, and we are pleased that Delphi is now positioned to move forward in its restructuring, the automaker said in a statement.

Platinum said it had been forced out of the running for Delphi because the company's debtor-in-possession lenders, which include Elliott Management and Silver Point Capital, refused to release their claim on the parts supplier's assets.