The last major European country to approve keeping Opel afloat with money backstopped by taxpayers could make a preliminary recommendation on Wednesday affecting as many as 120,000 jobs in Germany alone.

The Loan Guarantee Committee will meet in the Economics Ministry in Berlin to discuss Opel's request for 1.5 billion euros ($1.89 billion) in state aid three days after the ruling center-right coalition suffered a bitter defeat in a key regional election.

Preconditions before Germany offers aid include proof that the company fell into difficulty no earlier than the summer of 2008 as a direct result of the financial crisis, as well as locating banks willing to finance the loans.

PriceWaterhouseCoopers, the economics ministry's own independent expert, certified Opel was profitable until September 2008 and moreover has a positive future thanks to its new model range, Opel deputy chairman Klaus Franz told Reuters, warning that 120,000 jobs in Germany depended on the carmaker.

I await the outcome with both a great hope and great expectations.

Liberal Economics Minister Rainer Bruederle, the least popular cabinet member from the junior Free Democrats, has however often signaled his reluctance to approve a federal contribution to any aid package.

Opel Chief Executive Nick Reilly, who expects a final answer from Berlin by the end of this month, said on Friday generous contributions from other main Opel countries -- likely Spain and the UK -- meant Germany might be on the hook for less than 1.3 billion euros.

FROSTY RELATIONS

Reilly declined to provide specifics of the package, such as which banks may have signed up to participate in the loan.

We have made significant progress in this regard, an Opel spokesman said, referring to talks with lenders.

Relations between Berlin and Detroit have been frosty since early November when parent General Motors scrapped the sale of a majority stake in Opel to Magna heavily favored by Chancellor Angela Merkel,

GM initially saw its funding responsibility to its European subsidiary as completed once it paid back the remaining 600 million euros of an emergency loan from the German government, which Detroit needed to do by the end of November to regain 65 percent of the shares held by a trustee.

Itself on life support since last June when Washington gave it a $50 billion bailout, the U.S. carmaker came to realize Berlin wouldn't lift a finger following November's rift unless GM stepped up to the plate.

In March, GM said it would commit 1.9 billion euros in loans and even fresh capital to Opel.

($1=.7918 Euro)

(Reporting by Christiaan Hetzner; Editing by Anshuman Daga)

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