"Exploratory discussions with General Motors, concerning an alliance, could start if General Motors Corporation makes the proposal," Renault said in a statement.

A GM spokeswoman was not immediately available. The automaker's board met on Friday to consider the Kerkorian proposal, saying it would take the matter "under advisement."

Carlos Ghosn, chief executive at both Renault and Nissan, also was authorized by Nissan's board to pursue discussions about an alliance.

Renault has a controlling 44-percent stake in Nissan. The French state has a 15.33 percent stake in Renault.

Kerkorian owns 10 percent of GM, and analysts have said his attempt to broker a deal between the three parties increased the pressure on GM's current Chief Executive Rick Wagoner and opened the door to a greater role for Ghosn, who is credited with driving Nissan's revival from 1999.

The latest moves came as GM posted a 26-percent decline in June auto sales from a year earlier in the U.S. market, where the automaker has been struggling to shore up its market share as it cuts 30,000 jobs and shutters a dozen factories.

A tie-up with GM, the world's largest carmaker by volume, could put the Brazil-born Ghosn at the helm of a group that would be breathing down the neck of Toyota, which has a market value of some $190 billion.

But analysts doubted that the deal would benefit Renault because of the risk involved just as it has embarked on a recovery plan drawn up by Ghosn after he turned around Nissan.

Ghosn has expressed interest in buying a stake of up to 20 percent in GM at a dinner last month with Kerkorian, a source familiar with the situation said on Friday.

GM shares rose as much as 8.56 percent on Friday on Kerkorian's proposal and prospects of a speedier turnaround at the U.S. automaker, but shed 1.28 percent on Monday.

Some analysts estimate the stake could cost Renault about 2.6 billion euros ($3.32 billion).

Renault already owns the Romanian Dacia brand and has a stake in Samsung Motors of Korea. GM is the maker of Cadillac, Corvette, Saab, Hummer, Opel/Vauxhall and Chevrolet cars and has a stake in GM Daewoo of Korea.

Renault shares closed 0.24 percent up at 84.20 euros, partly on a rise in June French car sales.

STRUGGLE

"We struggle to see short-to medium-term synergies for both sides," Dresdner Kleinwort credit analyst Christophe Boulanger said in a research note to clients on Monday.

Boulanger said the acquisition would likely prompt the three rating agencies to shave at least one-point from its credit rating to BBB-level, and a potential negative outlook given the challenges to make a three-way partnership work.

Kerkorian's suggestion about a GM stake came after media speculation several months ago that Ford Motor Co had wanted Ghosn to jump ship and head the Dearborn-Mich. based group.

UBS said that the 2.6 billion euros ($3.33 billion) needed to buy 20 percent in GM could be financed by Renault if it sold its stake in truck maker Volvo.

Bruno Lapierre of CA Cheuvreux said a tie-up would work against the interests of Renault shareholders for the next three years at least. "Renault is at the start of an ambitious plan that requires many cultural changes within the group and dearly needs Mr Ghosn's management expertise in this process," he said.

Meanwhile Renault's shares fell 2.55 percent to 82.05 euros in early trade, making them the biggest loser in France's CAC-40 index. In Tokyo, Nissan's shares ended slightly higher.

"This has to be approached with enormous caution," Loos told i-Television.

"The United States is an immense market, a complicated market and General Motors is in a difficult situation because of problems that have nothing to do with cars."

The French government held 15.33 percent of Renault and 18.78 percent of its voting rights as at the end of 2005, according to the company's annual report.

Renault and Nissan said on Monday they were ready to start talks on an alliance with General Motors Corp, provided the U.S. group asked them. Together the three companies would form a $100-billion global industry giant.

General Motor's board will meet on Friday to discuss a response, Bloomberg News said on Tuesday. A GM spokeswoman in Tokyo said she had no knowledge of the meeting.

However, French business daily La Tribune saw potential advantages for Renault in any deal.

"GM's fall is such that its stock market value today is lower than that of Renault, which is only the 10th biggest automaker worldwide," the newspaper wrote in a commentary.

"Renault could therefore obtain a seat at the top table and a gateway to the North American market. At first sight that appears to be a good deal," it added.

The car industry is littered with the corpses of alliances that did not work out as expected, including BMW and Rover, DaimlerChrysler's ties with Mitsubishi Motors and GM's own past links with Italy's Fiat.

But established players remain under pressure to consolidate to cut overcapacity and costs, face new competitors from places such as China and to respond to consolidation among suppliers like steel makers.

An important measure of consumer financial distress, late payments on credit cards, ticked up in the first quarter, according to figures from the American Bankers Association. The Washington, D.C., based trade group said the percentage of bank cards 30 or more days past due increased to 4.40 percent in the January-March quarter from 4.27 percent in the final quarter of 2005.

The Federal Reserve's decision last week to raise short-term interest rates for the 17th consecutive time will boost yet again borrowing costs for consumers, likely prompting more delinquencies on credit card bills - as well as on auto loans and mortgages.

The slowing economy also is depressing income growth, so a greater percentage of take-home pay is going toward necessities and less is left over for debt payment.

Among the consumers who recently put a call into Dvorkin's counseling center was Andreia Marshall, an assistant project manager for a builder in Delray Beach, Fla.

Marshall said that after she broke up with her boyfriend, her paycheck wasn't big enough to cover her apartment rent, higher gasoline prices and other day-to-day expenses. Soon she started falling behind on her credit card bills.

"It got to the point where the credit card companies were calling," she said. "It's overwhelming, you feel as if you're drowning and you feel bad about yourself."

With help from a credit counselor, Marshall is working out a budget and whittling down her $13,000 in card debt, which she figures could take 3 1/2 years.

"I have to think about everything I spend," she said. "Sometimes in the grocery, I have to say to myself, 'Do you really need to buy this?' And I'm looking at things like, how can I not spend $80 on dry-cleaning."

Marshall said that instead of feeling deprived, she's feeling good about it.

"I'm proud about what I'm doing," Marshall said. "I'm paying that debt and getting educated, and I know I won't make the same mistake again.'"'

Catherine Williams, a credit expert with Money Management International, a Houston-based financial counseling and education agency, said rising costs for gasoline and utilities were only part of the explanation for rising credit card delinquencies and increased consumer financial stress.

"People refinanced (their mortgages) six months or a year ago, so the 'house bank' is empty," Williams said. "Most can't go back and tap their home equity again."

In addition, she said, consumers can only juggle debt payments for a while. As she put it: "You let the car payment go one month, then the house payment. Then you make a lot of little creditors happy for one month, maybe for two months. Then it becomes obvious that you have to catch up on car payments, and everything else slides."

Williams called it "a dangerous strategy" because consumers who let accounts go delinquent risk harming their credit ratings. A poor credit rating makes it harder for consumers to get loans and can force them to pay higher rates on the loans they do get.

Consolidated Credit's Dvorkin pointed out that millions of Americans rushed to declare bankruptcy before the law change last fall made it harder for them to discharge unsecured debts. The high level of bankruptcy filings temporarily depressed the delinquency statistics and other measures of consumer financial distress, he said.

"Now we're seeing a new crop of people starting to get into trouble," he said. "They can't keep up. They're the ones most affected by increased gas prices and higher rates."

He said juggling payments is one of the "leading indicators" that a consumer is in trouble. He added that other telltale signs are:

- You only make minimum payments month after month.

- You're taking cash advances on one credit card to make the minimum payments on others.

- You delay - or are late, with important payments, such as the monthly mortgage.

- You put off necessary activities, such as doctors' appointments.