General Motors was set to end months of suspense over the fate of its Opel unit on Thursday and announce whether it plans to sell the European carmaker to one of two rival bidders.
GM said in a statement its board had taken a decision on Opel after a two-day meeting.
A Sky News report, citing unnamed sources, said GM had decided to keep the Ruesselsheim-based carmaker it first took control of some 80 years ago, but two bankers close to the negotiations played down that report.
A source in Berlin said senior members of the German government, including Chancellor Angela Merkel, had not been informed of GM's decision as of Thursday morning.
Separate sources familiar with the proceedings told Reuters after the board meeting that GM had dispatched its chief Opel negotiator John Smith to Berlin, where he was expected to brief the trust supervising Opel and German government officials before a news conference scheduled around 4 p.m. (10 a.m. EDT).
The trust was set up in May to keep Opel from being swept into GM's bankruptcy and has the final say on who buys the company. It comprises two representatives each from GM and Germany, as well as an independent chairman who is supposed to act as an arbiter between the two sides.
General Motors' board of directors approved a course of action for its Opel subsidiary and will be communicating its recommendation to the German government, other European governments, both bidders, employees and the Opel trust board over the next 24 hours, GM said.
It was not immediately clear what action the GM board had chosen after spending the past month weighing the merits of selling its European unit against the cost of keeping it.
The decision is being closely watched in Germany, where Opel employs roughly half of its 50,000 European workers at four plants making everything from three-door Corsa subcompacts to Zafira vans.
The carmaker has two factories that produce automobiles under the Vauxhall badge as well as major sites in Belgium, Poland and Spain.
Chancellor Angela Merkel, facing an election on September 27, has thrown her weight behind Canadian auto parts group Magna's bid for Opel, promising 4.5 billion euros ($6.6 billion) in government guarantees if GM opts for the Russian-backed offer.
Berlin believes the Magna bid guarantees the brightest long-term future for Opel, which traces its roots in Germany back to the 19th century.
Opel workers are preparing mass protests if GM fails to pick Magna, a labor leader said. We will then tomorrow with many thousands of people go to Eisenach ... and will symbolically protect the factory from access with a chain of people, Klaus Franz said on German television station ZDF.
But GM management has said a rival bid by Brussels-listed RHJ International, which Berlin is refusing to help finance, would be easier to implement.
Some elements within the board are known to have favored keeping Opel instead of selling it to either bidder, but all three options carry risks for GM, which is struggling to turn itself round under U.S. government majority ownership.
Magna wants to use plant capacity at Opel by tapping into its expertise in contract manufacturing and building rival models for outside carmakers. It forecasts high growth rates, particularly in Russia, home of its consortium partners Sberbank and GAZ.
Under its proposed plan, Magna and Sberbank would each own 27.5 percent of the company, while Opel employees would hold 10 percent and GM the remaining 35 percent. Some 10,000 European jobs would be cut, 25 percent of those in Germany.
RHJ plans to take a majority stake in Opel and shrink production to return the company to profit. It plans about the same number of job cuts as Magna and would be expected to sell its holding in the company at some point in the future, possibly even back to GM.
(Additional reporting by Maria Sheahan; Editing by David Holmes) ($1=.6898 euros)