On Wednesday, the Federal Government confirmed that it will be now holding a major stake in the struggling auto lender GMAC after approving additional bailout funds worth $3.8 Billion to help the troubled company. GMAC was unable to raise the funds required to balance out its massive losses through private investors.

Although for months now the Treasury has asserted that the money would be needed by GMAC, the decision to increase the Government's ownership stake has come as an unexpected development.

With this stake, the Government now holds a majority share in three firms - GMAC, General Motors and American International Group, the insurance giant. Also, the administration has a major stake in Citigroup and Chrysler.

"We said, if you do not go raise capital from the private markets, if you are unable to, we will put capital into you because it is important to the stability of the system. It was never going to be possible for GMAC. They are in a unique and difficult situation", said Treasury Secretary Timothy F. Geithner.

The move has been bitterly criticized by the Congressional Republicans.