New York  - The US government wants a bankruptcy court to approve the reorganization of struggling car giant General Motors by the end of next week and has threatened to otherwise pull out of the rescue deal, GM's chief executive Fritz Henderson said Tuesday.

Speaking at the start of a crucial legal hearing in New York, Henderson warned that GM's survival was dependent on the court backing what amounts to a federal takeover.

The Detroit-based company is hoping to get approval to shed its worst performing brands and emerge from bankruptcy under the US government's control.

The plan is being challenged by a number of GM's creditors, and the New York court hearing was expected to last several days. Some workers protested outside the building in lower Manhattan over GM's plans to slash jobs and cut benefits.

GM filed for bankruptcy at the start of June, becoming the largest US manufacturer ever to seek court protection from its creditors. It hopes to emerge from the process by the end of August.

The US and Canadian governments will own a combined 72 per cent of "new GM" when the reorganized company does leave the bankruptcy process, in exchange for more than 30 billion dollars in new loans to keep GM afloat, but Washington and Ottawa have said they will not be involved in day-to-day management.

Creditors would get 10 per cent of the new company, and a labour union health-care trust will take a 17.5-per-cent stake.

The hearing comes three weeks after smaller US rival Chrysler emerged from the bankruptcy process in less than two months, offering some hope to GM executives that they, too, can survive the process. (dpa)