* GM, Germany continue talks with bidders

* GM says did not make recommendation to board on Monday (Adds more details, quotes from state premier)

U.S. carmaker General Motors [GM.UL] and German officials began a fresh round of talks on Tuesday to try to narrow their differences on which bidder they want to take control of its Opel unit.

Canadian auto parts group Magna (MGa.TO) and Belgium-based financial investor RHJ (RHJI.BR) are locked in a takeover battle for Opel, control of which GM intends to relinquish in return for state support.

However, GM's chief negotiator said at the start of the negotiations the two sides would reach no decisions on Tuesday.

If you're asking me to select one bidder, no, John Smith told reporters as he went into meetings with officials from the German government. The two sides are meeting representatives from the two main bidders separately.

A person familiar with the negotiations told Reuters the first meeting, with Magna, did not yield any decisions. The meeting with RHJ was continuing.

GM, which holds 35 percent of Opel, and Germany, which will provide state aid, must agree on the buyer but so far the two have disagreed. Germany prefers the Magna offer and GM likes RHJ's bid.

There are some signs the talks may end up dragging on for weeks as the U.S.-based company had said earlier it needed more time to negotiate with the two potential partners.

GM had been expected to recommend one of the bidders to its new board of directors at a meeting on Monday. But it said on Tuesday it merely brought the board up to speed on talks without making a recommendation as negotiations were dragging on.

Juergen Ruettgers, the premier of North Rhine-Westphalia where Opel has a plant, criticised GM for hesitating.

I don't think it is right and it is being done on the back of the Opel workers in German, Poland and other European factories, Ruettgers told Bayerischer Rundfunk radio.

He added that the German government had already expressed its preference for the Magna bid.

OUTSTANDING POINTS

Smith declined to say which points were still outstanding, merely telling reporters that the two sides would discuss issues raised by the two offers and consider their positions.

German Economy Minister Karl-Theodor zu Guttenberg had said in a weekend newspaper interview both suitors had to improve their bids to win government backing.

Magna, the Canadian auto parts supplier, wants to expand Opel's full-scale car assembly business and forecasts high growth rates, particularly in Russia, home of its bidding partner, state-controlled bank Sberbank (SBER03.MM).

RHJ aims to shrink production to return Opel to profit and may be open to selling it back to GM at a later date.

Less than two months before an election in Germany, Chancellor Angela Merkel's government, and the four federal states which are home to Opel plants, fear RHJ will cut more jobs than Magna.

Germany has said it aims to have a deal closed in September. (Additional Reporting by Angelika Gruber; Writing by Maria Sheahan, Madeline Chambers and Sarah Marsh; Editing by Rupert Winchester and Greg Mahlich)


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