OppenheimerFunds, one of Chrysler LLC's dissident secured lenders, said on Friday it has decided to withdraw its opposition to the automaker's proposed debt restructuring plan as it no longer expects to increase its recovery rate.

OppenheimerFunds was among the group of holdout creditors that own a combined $295 million of the automaker's $6.9 billion in distressed debt and which rejected a deal that offered them only 29 cents on the dollar.

About 20 senior lenders, led by OppenheimerFunds and Stairway Capital, had also sought to block Chrysler's plans for a sale of its best assets into a new company owned by its union, Fiat and the government.

Given the reduced number of senior creditors willing to continue to pursue an alternative to the federal automotive task force's proposed settlement, OppenheimerFunds has determined that the senior creditors can no longer reasonably expect to increase the recovery rate on the debt they hold by opposing the task force's restructuring plan, it said in a statement.

The fund said it was now willing to adhere to the determinations of a U.S. Bankruptcy Court.

President Barack Obama called the dissenters speculators in public criticism for refusing to join Chrysler's biggest banks in a government-brokered deal to wipe out Chrysler's $6.9 billion debt and move forward with the Fiat alliance.

More than half of the parties that had opposed Chrysler's plan have already dropped out of the group as public and political pressure grows to restructure the automaker quickly.

Chrysler