SHARES in Leyland-based Torotrak slumped by more than a half after motor giant General Motors went cold on a licence for gearbox technology.

General Motors (GM) will not exercise an option for a production licence for Torotrak's Infinitely Variable Transmission (IVT) system.

While Torotrak said test vehicles proved the success of the technology, GM blamed commercial reasons for putting the new technology on the back burner.

A statement from Torotrak said GM had indicated it was still prepared to continue dialogue and review the readiness of the IVT technology.

However, Torotrak's share price took the brunt of the announcement as the stock fell 54% to 44p a share within hours of the announcement.

Torotrak, based in Leyland, has been working with GM for five years on the technology which uses computer controls to reduce fuel consumption.

Ford is currently at the testing stage, while Torotrak also works closely with "tier one" development suppliers including Getrag of Germany.

Torotrak said test vehicles tested by GM met technical and functional requirements, achieved fuel economy targets and exhibited "excellent driveability".

It added: "However, commercial considerations have led to GM's decision not to undertake any further internal development work for the foreseeable future."

Chief executive Maurice Martin said Torotrak had recognised that delivery of new technology was increasingly in the hands of the tier one suppliers.

He said: "Our strategy to build strong tier one supplier partnerships is already in place."