WASHINGTON --Talks are underway to secure what would be the largest-ever US bankruptcy loan for General Motors and Chrysler, in the event that the struggling US automakers opt to file for Chapter 11 protection, The Wall Street Journal reported Monday.

The daily reported that discussions are underway between lenders and advisers to the US Treasury Department, who work outside the US government.

Citing "people familiar with the matter," the newspaper said the package could exceed 40 billion dollars.

The two automakers received more than 17 billion dollars in bailout money from the US government last year and have publicly said that bankruptcy was not on the table.

But people involved in talks with senior Obama officials said the administration believes that Chapter 11 filings are an option that should be given serious consideration.

"Everything is on the table right now," the paper quotes one unnamed person involved in the matter as saying.

The discussions call for private banks to provide financing -- known as a debtor-in-possession loan -- with the government guaranteeing it, the report said.

Under this scenario, some of the financing would be used to repay the 17.4 billion the government lent GM and Chrysler last year.

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