The US Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by June 1, even though the automaker has publicly stated it could reorganize outside of court, The New York Times reported on Sunday (local time).

GM is operating under emergency US government loans. It has been told by the Obama administration's task force overseeing its bailout that it must cut costs and reduce its debts in order to continue to receive aid.

The White House-appointed automobiles task force has given GM 60 days to come up with a restructuring plan and it is trying to determine whether the giant automaker can remain a viable company.