Klaus Franz was shocked last week when GM's board abruptly dropped plans to sell a 55 percent stake in Opel to auto parts maker Magna and its Russian bank partner Sberbank .

"GM does not enjoy any credibility or faith in the eyes of the public or the (German) government, so they have to consider whether they now want to seek confrontation or cooperation by finding a common solution," Franz told Reuters on Sunday.

"To see whether they are interested in cooperation, we need to know whether they are willing to start off where we last stopped -- namely, the degree of autonomy and freedom that was set in the contract with Magna and accepted by General Motors," he said.

He said this was a clear condition for any talks. GM's chief executive, Fritz Henderson, is due to travel to Opel's headquarters in Ruesselsheim this week and is expected to discuss the decision with local management on Monday.

Following the sudden decision last week to drop the sale management scared unions by threatening Opel's bankruptcy and its German boss Carl-Peter Forster left the company after attacking the board's decision.

A newspaper report said on Sunday that Forster, a former BMW executive and son of a German diplomat who grew up in London, is now slated to take over as head of Indian group Tata Motors' British carmaker Jaguar Land Rover.

Briton Nick Reilly, currently head of GM's international operations, is now set to lead the reorganisation of Opel, a person briefed on the plan told Reuters on Friday, with GM's global marketing chief Bob Lutz to be Opel's new chairman.

Lutz was quoted as saying on Sunday that GM would probably stick to a plan to slash fixed costs at Opel by nearly a third. "The restructuring plan developed at the end of last year is still the basis for a profitable business model. The plan foresees a 30 percent cut in structural costs," he told Swiss newspaper Sonntag.

Meanwhile Magna's top European executive, Siegfried Wolf, advised GM to give more freedom to Opel and tread carefully with regard to the brand.

"GM must now smooth things out and win back trust. That requires a lot of sensitivity and tact," he was quoted as telling German newspaper Bild am Sonntag.

(Reporting by Christiaan Hetzner, additional reporting by Emma Thomasson in Zurich; Editing by Greg Mahlich)