DETROIT: The US government's foray into the car business is slowly coming to an end. The Treasury Department said on Wednesday that it will sell its remaining stake in General Motors in the next year or so, winding down a $50 billion bailout that saved the iconic American car giant but also set off a heated debate about government intervention in private business that even influenced this year's presidential election.    

Taxpayers will lose money on the deal, but it gets the government out of the car business. GM has done well over the past three years, piling up $16 billion in profits as car sales bounced back.

Now it looks forward to losing the stigma of government ownership, including the derisive moniker ''Government Motors'', that it claims cost it sales since it left bankruptcy protection in 2009.

As part of a deal announced Wednesday, GM will spend $5.5 billion to buy back 200 million shares from the Treasury from now through the end of the year.

That will leave the government with 300 million shares, or a 19 per cent stake, which it plans to sell during the next 12 to 15 months.

The government bailed out GM with $49.5 billion during the financial crisis in 2008 and 2009. Otherwise the struggling automaker would likely have been auctioned off in pieces.

The Treasury Department says it will have recouped about $28.7 billion after GM completes its buyback. So, breaking even would require selling the remaining 300 million shares for an average of about $70 each.

That's more than double the current trading price. GM will buy the 200 million shares at $27.50 each, about an 8 per cent premium over Tuesday's closing price of $25.49.

The shares shot up more than 8 per cent to $27.60 in midday trading Wednesday. At a more realistic price of $30 apiece, the government gets back $9 billion for its remaining shares.

That means taxpayers would recoup around $38 billion, or about 77 per cent, of the initial investment, resulting in a loss of about $12 billion.

GM says having the government as an owner kept customers away from dealerships. Chief Financial Officer Dan Ammann told reporters Wednesday that GM has ''market research that we've done over time that has suggested that the government involvement in the business has had some impact on sales.''

He added that GM should benefit when the government is completely out. As part of the stock buyback deal, GM almost immediately will be allowed to own a corporate jet or be required to manufacture a certain percentage of cars and trucks in the US GM says it already has exceeded the manufacturing requirements and will continue to do so for the foreseeable future.

It has no immediate plans to buy or lease corporate jets, but it has chartered jets for executive travel at times.

However, government-ordered pay restrictions will remain in effect until the Treasury completes the sale of its remaining 19 per cent stake. CEO Dan Akerson has said the pay limits have hurt the company as it tries to recruit top talent.

The bailouts of GM and rival Chrysler were part of the Trouble Asset Relief Program created by Congress during the financial crisis in the fall of 2008.

Last week, Treasury sold its final shares of stock in insurance giant American International Group, which had received the largest amount of government support during the financial crisis.