American car giant General Motors today confirmed it was in talks with the Daewoo motor company in a move which could save 750 Sussex jobs.

GM has begun negotiations with the troubled company, which owns a technical centre in Worthing.

The bid is being made in alliance with Italian company Fiat.

Employees at the Worthing base received letters last month saying the company had hit a cash crisis and could not pay their wages.

They have since been told they will now receive their money from an unnamed European subsidiary.

In a joint statement issued with South Korean creditors today, GM confirmed it had agreed to begin negotiations on the acquisition of passenger vehicle assets and related Daewoo businesses.

It added: "This first phase is expected to proceed rapidly and upon further agreement will be followed by formal negotiations."

Daewoo's main creditor, the state-run Korea Development Bank, said the initial talks could last a month.

Lee Keun-Young, head of South Korea's Financial Supervisory Commission, said: "I don't think much time would be needed to come to a conclusion on the Daewoo issue, and also I don't think there would be a situation similar to that involving Ford."

In September, rival US car maker Ford withdrew a £5 million bid for Daewoo.

Many workers at Daweoo have been hunting for new jobs and Ford has tried to recruit disgruntled employees.

Seoul-based Daewoo is billions of pounds in debt, and has already announced 113 job loses in Worthing.

A Daewoo spokesman said the new bid would be "great news" because it would secure the future of the company and its employees.

Daewoo said it needed a £287 million cash injection to continue its operations until the end of the year.

West Worthing MP Peter Bottomley has been in touch with officials at the Korean embassy to try to resolve the situation.

In a letter to representatives, he said: "The technical centre is world class. I hope the staff will be able to go on designing world class vehicles."

However, South Korea's leading newspaper, Chosun Ilbo, quoted industry officials as saying they expected GM-Fiat to offer to acquire only selected portions of Daewoo's profitable domestic operations.

It said GM-Fiat did not appear to be interested in Daewoo's heavily indebted foreign operations.