TORONTO - Billions of taxpayer dollars aimed at bailing out struggling automakers will more likely be used to "keep the lights on" rather than directly transform the companies into more innovative businesses, Ontario Premier Dalton McGuinty acknowledged Monday.

The Ontario and federal governments are lending up to $4 billion to the Detroit Three automakers to help stave off bankruptcy, and have vowed to attach major strings to the deal.

The automakers must provide viable restructuring plans that will put them on a path to financial stability, and agree to certain terms and conditions that are still under negotiation.

However, McGuinty said he expects that the automakers, which received their first instalment Dec. 29, will use the money to pay off mounting bills rather than retool their factories to produce the cars of the future.

"At this point in time, it is not so much for purposes of innovation and retooling as to keep the lights on, allow them to meet payroll, allow them to pay their suppliers and the like to keep things going -- kind of nurse them along -- so that in the interim, they can develop a more extensive plan that talks about fairly dramatic reforms," he said.

General Motors is slated to received up to $3 billion in repayable loans from the federal and provincial governments, while Chrysler will receive up to $1 billion. Ford, the third member of the Detroit Three, didn't ask for a loan, just a line of credit to draw upon if required.

The companies are to receive the money in three instalments, with the second portion coming on Jan. 30 and the third on Feb. 27.

The U.S. government is also providing GM and Chrysler with US$17.4 billion in emergency loans.

Despite dismal December sales figures, McGuinty said he's not worried he may be throwing money at a dying industry.

Even the Japanese automakers, which have fared better than their North American counterparts, are experiencing "their own particular challenges" in the midst of a massive global economic downturn, he noted.

"People just aren't buying as many cars as they used to," McGuinty said. "So, no, we remain as committed as ever to doing what we can to support the Big Three."

Last month, Toyota and Honda's U.S. sales fell more than their U.S. competitors, with Toyota's 37 per cent decline and Honda's 35 per cent drop showing their popular fuel-efficient models had little appeal to consumers due to a dismal economy.

Ford Motor Co.'s U.S. sales fell 32 per cent in December, while General Motors Corp.'s dropped 31 per cent. Chrysler LLC and other automakers were to report their U.S. sales for December and 2008 later Monday.