LONDON (AFP) - The government said Wednesday it was keen to hold talks with General Motors after it scrapped plans to sell carmaker Vauxhall, which with Opel is part of GM's European operation.

GM announced overnight it had ditched the sale of its European car division to Canadian auto parts group Magna International and Russia's Sberbank, citing the "improving business environment."

"I am keen for very early discussions with GM over their plans for the business and how they will affect British plants and workers," Business Secretary Peter Mandelson said on Wednesday.

"I have always said that if the right long-term sustainable solution is identified, then the government would be willing to support this."

The GM decision affects Vauxhall's 5,500 workers that are mainly employed at car plants at Luton and Ellesmere Port, near Liverpool.

Unite, Britain's biggest trade union, said it welcomed GM's decision to scrap the sale of its European unit.

"This is an incredible turnaround from General Motors. I am absolutely delighted with this news," said Unite joint general secretary Tony Woodley.

"It is fantastic news for the UK and right that General Motors does not break up its family and instead retains ownership of Vauxhall."