The South Korean firm, which has now been bought by the world's biggest car maker, General Motors, is up to its ears in debt.

Its biggest supplier, Delphi Automotive Systems, stopped delivering parts on Tuesday due to payment delays.

Rival suppliers have also threatened to halt supply later this week.

"We have a limited inventory of components," said a spokesman for Daewoo. "Our chairman is continuing talks with our biggest suppliers to seek their cooperation."

The production halt is equivalent to about 2,000 cars a day and will cost the firm an estimated 15bn won ($12.5m; £8.2m) daily.

Threat to GM deal

Daewoo was declared bankrupt in 2000 with liabilities of $17.5bn, and its motor division has been suffering since the Asian financial crisis.

A group of 191 part suppliers are seeking about 850bn won in back pay.

Daewoo says it need the approval of its other creditors before handing out money to suppliers.

General Motors had planned to launch a new company - GM-Daewoo Auto and Technology - in October, despite the dispute among creditors over how to share losses.

But analysts are already questioning whether such production delays could be a stumbling block to the troubled take-over.