General Motors has tripled its funding of European arm Opel and cut its request for state aid in a bid to win over European governments and labor.

The U.S. carmaker said it will provide 1.9 billion euros ($2.57 billion) in equity and loans -- up from the 600 million euros first earmarked -- which Opel said on Tuesday would provide enough cash to operate through the end of this year.

Opel had previously said it had enough liquidity to last well into the second quarter.

GM last year drew the anger of European governments and workers when it scrapped plans to sell Opel and asked them to contribute to the cost of returning the carmaker to profit.

Germany -- asked to provide the lion's share of aid -- had been cool to the idea of funneling taxpayer funds into Opel after GM abandoned a deal with Canada's Magna that German Chancellor Angela Merkel had helped broker.

Labor representatives have baulked at GM's plans to shut an Opel factory in Belgium and rescinded their promise to contribute 265 million euros in annual cost concessions.

GM's plan for Opel envisages 8,300 job cuts factories across Europe, shuttering the Antwerp plant, 20 percent capacity cuts and a return to profit by 2012. Opel has about 50,000 workers, half of which are based in its four German factories.

Opel labor chief Klaus Franz, who had demanded that GM invest at least 1 billion euros to restructure Opel, said GM's promise to provide more funding would help the company's chances of getting approval for aid.

That will create trust among governments throughout Europe -- I am sure of that, he told Reuters.

ASKING FOR LESS

We hope that our strong commitment will be well received as a major milestone in our ongoing discussions about government guarantees to cover the remaining gap, Opel Chief Executive Nick Reilly said in a statement on Tuesday.

It is of vital importance for GM to demonstrate our commitment for our European operations, GM Chairman and CEO Ed Whitacre added.

GM had originally asked European countries with Opel plants -- including Germany, Belgium, Britain, Austria, Poland and Spain -- to contribute 2.7 billion euros of aid.

Opel said on Tuesday that the U.S. carmaker has cut its request and is now asking the governments for less than 2 billion euros. It has also increased the total restructuring budget at the request of the governments.

Germany's government is still considering GM's application for state aid, a spokeswoman for the economy ministry said, adding that GM's decision to provide more funds for Opel showed that the company has the means to help its European arm itself.

In Madrid, an industry ministry spokesman said: We're still waiting to see GM's industrial plan for Opel, which we will support if it guarantees the company's future viability and wins union support.

GM last year briefly slipped into U.S. bankruptcy protection as consumers tightened their belts amid the global economic crisis, causing the worst downturn in auto sales in decades.

Backed by over $50 billion in U.S. government aid, it has slashed costs, cut 34,000 jobs last year, eliminated $78 billion of debt and built up a cash hoard of almost $43 billion.

(Addtional reporting by Angelika Gruber in Frankfurt, Gernot Heller in Berlin and Tracy Rucinski in madrid; Editing by Hans Peters and Michael Shields)

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