On Tuesday, GM and Chrysler are supposed to present their so-called ‘viability plans’ to the US government. The plans are part of deal that saw the two carmakers bailed out with billions of dollars of taxpayer’s cash just before Christmas.

But with sales for both makers in January pretty much down 50 percent compared to a year earlier, viability is probably not the most appropriate term.

Perhaps it’s not surprising then, that news leaking out over the weekend suggests that GM could seriously consider tabling a proposal that sees it go into voluntary bankruptcy.

One suggestion is that if GM cannot do a deal with the government for another massive injection of aid – possibly more than $18bn first discussed - the company would file for Chapter 11 protection.

This would see GM’s viable global divisions would be bundled into a new company and what’s not wanted would be put under the hammer or into bankruptcy proper.

One advantage of this is that GM’s tricky contracts with dealers, suppliers, creditors and the unions could then be reworked.

Indeed, GM’s negotiations with the United Auto Workers union broke up a couple of days ago and were due to re-start yesterday.

The Union is still resisting a new deal that would see it take more responsibility for the massively costly health care scheme for retired workers.

UAW President Ron Gettelfinger is said to be hoping the US government will also take some responsibility for the health care scheme.

Gettelfinger has already been held responsible by some for bringing down the first auto industry rescue package. The negotiations collapsed when he refused to bring his member’s pay package immediately into line with that offered by foreign-owned car factories in the southern US.

However, the US government has warned GM that all ‘stakeholders’ (including shareholders and bondholders) must make sacrifices, not just the workers.

Most observers don’t expect the viability plans to be in fully finished form by Tuesday.

But if GM can’t negotiate new deals - and the Government decides not to pour good bailout money after bad - it may decide the unthinkable is inevitable and pull the plug, sending a shockwave through the global car industry.

The question is, who’ll blink first?