Chrysler LLC's biggest lenders and the US government reached a breakthrough framework deal to cut the automakers' debt by $6.9 billion, but bankruptcy still loomed as a strong possibility, officials said yesterday.

The near-term future of the American icon hinged on several parts coming together before tomorrow's US government deadline to prove that the company can be viable again.

"We don't want to prejudge the outcome. There is still someway to go in the negotiations, so I would not rule anything in or out," White House spokesman Robert Gibbs said after the administration confirmed the deal with most of Chrysler's primary debtholders.