German Economy Minister Rainer Bruederle has rebuffed a request by Ford's German unit for state support, saying the U.S. carmaker's business was recovering, a newspaper reported on Friday.

Ford had asked the European Investment Bank (EIB) for a 200 million euro ($254 million) loan that needs backing by German government guarantees, German business daily Handelsblatt reported, citing from documents it obtained.

Given the improved economic development and Ford's financial strength, there are no more reasons to support the carmaker, the paper cited from an internal document at the ministry.

Ford had asked for funding for a new three-cylinder engine factory at Ford's European headquarters in Cologne, the paper said.

Ford officials in Germany were not immediately available for comment.

Rival General Motors GM.UL last month dropped its request for European aid to restructure its Opel unit, opting to fund the sweeping turnaround plan on its own after government talks bogged down.

(Reporting by Ludwig Burger; Editing by Michael Shields)