The U.S. Treasury is concerned about how many foreign investors it should allow to buy big stakes in General Motors Co's proposed initial public offering, the Wall Street Journal said.

The Treasury is cautious because it is looking to minimise any political fallout from the IPO, the Journal said, citing people familiar with the matter.

The Treasury may decide which of the non-U.S. investors, such as sovereign wealth funds, should be invited to be cornerstone investors, the people told the Journal.

Cornerstone investors are selected to commit to buying and holding a large stake at a set share price as a show of confidence intended to draw in other investors.

General Motors took a big step towards repaying a controversial taxpayer-funded bailout by declaring plans for a landmark stock offering that represents a critical test for the Obama administration.

The U.S. government currently owns almost 61 percent of GM after converting $43 billion (28 billion pounds) of the $50 billion in funding to the automaker into equity.

The U.S. Treasury could not immediately be reached for comment by Reuters outside regular U.S. business hours.

(Reporting by Sakthi Prasad in Bangalore; Editing by David Cowell)