Standard & Poor's Corp., issuing its most explicit warning yet that auto giant General Motors Corp. is at risk of filing for bunkruptcy protection, slashed GM's credit rating deeper into "junk" territory and warned that Chief Executive Rick Wagoner's restructuring plan may not be enough to turn the company around.

"We're saying bankruptcy is more of a possibility than had seemed to be the case previously given the deterioration in their business prospects and their financial condition," S&P credit analyst Scott Sprinzen said in an interview.

S&P donwgraded GM's corporate credit rating two notches to a B, with a negative outlook, from a previous rating of double-B-minus. With its move, S&P put the company in a category of firms more likely to default - the sahre of single-B rated companies that default within one year is about 5.7%, while the comparable default rate for double-B rated companies is 1.2%.

The ratings firm kept its double-B rating on General Motors Acceptance Corp., GM's finance arm, in which the auto maker is seeking to sell a majority stake. S&P warned that if GM fails to secure a deal, the finance arm's ratings could be lowered to match those of the parent. That could hamper GMAC's ability to compete or grow.

Last month, Moody's Investors Service also lowered its rating on the auto maker further into high-yield, or junk, status.

GM spokeswoman Toni Simonetti yesterday pointed to a November letter to GM employees from Mr. Wagoner that said GM has "no plan, strategy, or intention" to file for bankruptcy. "We believe we have made some important progress," she said, noting a recent health-care agreement reached with the United Auto Workers and a recently outlined plan to cut 30,000 jobs by 2008 and close nine North American manufacturing facilities. GM has said it plans to cut annual costs by $7 billion by the end of next year.

In its statement, S&P said that despite GM's efforts to cut costs, "the benefits of such measures could be undermined unless its market share stabilizes without the company's resorting againg to ruinous price discounting."

The latst downgrade, the third time S&P has cut GM's rating this year, comes as the agency expresses greater concern about a continued decline in GM's market share and its dependence on large trucks and sport-utility vehicles. Demand for larger SUVs has plummetedthis year in the face of higher gasoline prices and increased competition from more fuel-efficient crossover vehicles. The agency said it is "now dubious" whether GM's new line of SUVs and trucks, set to be introduced next year, will return GM's North American auto business to profitability.

GM faces other challenges, including potential employee liabilities from former parts unit Delphi Corp.