The problems facing Detroit's three carmakers, which are struggling to survive amid the worst trading conditions in 25 years, are quickly claiming a prominent position in president-elect Barack Obama's bulging "in" basket.

General Motors and Chrysler failed to cobble together support from the Bush administration for a merger ahead of Tuesday's US election, in spite of efforts to impart a sense of urgency on the need for a government-backed deal.

Mr Obama's administration may find providing aid to the struggling industry to be equally unpalatable. But it may have little alternative if it aims to avoid a collapse of one or more carmakers.

While Mr Obama will not take office until January 20, a deal between GM and Chrysler - or an alternative effort to save them from bankruptcy - could be struck earlier if current officials are willing to broker a solution with input from the incoming administration.

Representatives of the carmakers and Mr Obama's administration have been talking for weeks, but lobbying efforts have now kicked into full gear. GM, Chrysler and Cerberus, the buy-out group that owns Chrysler, are clamouring over what they say is an increasingly dire need for help, following a precipitous plunge in US auto sales last month.

That sales decrease was spurred partly by a drop in demand but also by the credit crisis, which has decimated auto lending and helped push GMAC, GM's auto and mortgage lending arm, to a $2.52bn thirdquarter loss.

A bankruptcy of GM - the largest and most immediately cash-strapped of Detroit's three producers - could take down Ford Motor as well. The two companies share a number of suppliers, many of which are themselves verging on insolvency.

"If one of these guys goes down, it would probably take the entire industry down," said David Cole, chairman of the Center for Automotive Research, an Ann Arbor, Michigan-based non-profit group associated with the University of Michigan. "The numbers are that stark."

A failure of America's domestic carmakers and their supplier base would affect some 2m jobs and have a $200bn impact on the economy, Mr Cole said.

GM, Chrysler and Cerberus have agreed on the amount of support they are seeking from the government, according to one source close to the talks.

Several industry sources have pegged that number at at least $10bn. But the structure under which that support would be given, if at all, is still up in the air.

"Nobody wants this to be something where they come back every so often and ask for more," said one person involved in the talks. Proposals for government support range from loan guarantees, a fast-tracking of a current $25bn loan programme - ostensibly aimed at retooling factories to produce low-emission vehicles - direct injections, or a hybrid model, in which the government could guarantee loans in exchange for preferred ownership in the company.

"A loan guarantee could work, and so could a direct injection," the source said. "But a direct injection brings along issues of governance, which are uncomfortable for everybody."

Detroit's Big Three could remain a thorn in Mr Obama's side well into next year, if the unions and other blue-collar workers, who form part of his constituency, hold him accountable for the handling of a problem he inherited.

"The car companies, because they're dependent on the finance companies, are a collateral victim of the credit crisis and they shouldn't be overlooked," said one source involved in the merger talks. Roger Altman, who worked on the 1979 bail-out of Chrysler as assistant Treasury secretary, is among those advising GM and stressing the need for rapid government support.

Opponents to government aid have been equally vocal, however, pointing to the continuing malaise at government-backed insurer AIG as evidence that dumping cash into failing institutions without dramatically reworking their strategies and management does not work.