The German government has decided to buy the shares in European Aeronautic Space and Defense Company ( EADS) to be sold by German-U.S. auto giant DaimlerChrysler, the mayor of Hamburg Ole von Beust said Thursday.

"The government, and above all the chancellor, decided yesterday evening that the shares being put up for sale by DaimlerChrysler will be bought by Germany," von Beust told reporters in Hamburg after meeting Airbus new chief Louis Gallois.

A working party would be set up "to ascertain what Hamburg's contribution will be exactly. But that's still in transition," von Beust said.

"It's certain that the shares will be bought," said the mayor, but he declined to give further information.

However, von Beust's statement was swiftly denied by German Chancellor Angela Merkel who is meeting French President Jacques Chirac in Paris.

"No decision has been reached yet," she said.

DaimlerChrysler currently holds 22.5 percent of EADS. France is represented via a 15-percent stake held by Sogeade and 15 percent via Lagardere, which has promised to halve its share, putting French interests back on a par with German interests.

DaimlerChrysler has indicated it might reduce its stake by 7.5 percent to 15 percent and there has been widespread speculation that the German government would buy those shares to keep the balance between French and German interests.

Source: Xinhua