General Motors and Chrysler are in talks about a possible merger.

Reports from the US media say talks have been going on for a month but details of the deal vary from a merger to an acquisition by GM of Chrysler.

Neither of the parties have made any direct official comment.

Sources told the Wall Street Journal that Cerberus Capital Management, which owns 80.1% of Chrysler had proposed trading its automotive operations to GM in return for GM's stake in the auto lender GMAC Financial Services.

The New York Times's sources spoke of a merger that was a "50-50" possibility, although it could take weeks to finalise and had been stalled by the turmoil in the financial markets.

GM will only say that it “routinely discusses issues of mutual interest with other automakers”.