WASHINGTON, Dec 20, 2008 (AFP) - Leading US newspapers on Saturday welcomed President George W. Bush's plan to rescue struggling automakers, saying the cost of not acting could have been devastating to the world's biggest economy.

"The only thing worse than the administration's plan would have been doing nothing," The Washington Post said in an editorial.

"As the US and world economies spiral downward, the collapse of GM and Chrysler could have crippled many of their suppliers and possibly Ford -- and even could have endangered the US operations of Asian and European companies."

The New York Times said the loans to General Motors and Chrysler will protect the economy from a potential wave of additional job losses.

"But they do not guarantee Detroit's long-term survival," the Times warned. "President-elect Barack Obama's administration will still have to make hard choices about how to help Michigan's auto industry shrink and become more energy efficient.

"It must do so if there is any hope of Detroit becoming viable again and making cars that drivers would want to buy and that would make sense in an increasingly oil-hungry world."

On Friday, Bush unveiled a 13.4 billion dollar rescue loan for the automakers, but demanded tough reforms in return in a move aimed at staving off a new economic calamity.

General Motors and Chrysler, facing a threat of imminent bankruptcy that could create economic chaos and throw millions out of work across the country, agreed to the terms and will get the loans starting December 29.

GM will get 9.4 billion dollars in two installments through mid-January and Chrysler up to four billion this month, officials said.

Ford said it would not be part of the loan program, which could include an additional four billion dollars from February for GM pending congressional action.

The funds will come from the Treasury's 700 billion dollar Troubled Asset Relief Program (TARP) approved in October to bail out struggling financial institutions.