In the bidding for French engineering conglomerate Alstom, the government in Paris has said it wouldn't relinquish control over the country's industrial icon.

France's Socialist government had decided to take a 20 percent stake in the company, Economics Minister Arnaud Montebourg announced on Friday. Paris would buy the stake from French building company Bouygues, which owns 29 percent of Alstom, Montebourg added.

The move will make the French state the biggest shareholder in Alstom and will deal a setback to US-based company General Electric (GE) and a joint effort by Germany's Siemens and Mitsubishi Heavy Industries (MHI) from Japan, which have made offers to take over Alstom's power business.

Montebourg also said that the government was nevertheless in favor of the bid made by GE, adding, however, that the US firm still needed to improve its offer. He described the Siemens-MHI offer as serious, but the government had decided against it.

Paris is now seeking to create an alliance between GE and Alstom in nuclear, steam and renewable energy, in which both parties would own 50 per cent. The government insists that it gets control over the joint venture through a "golden share," giving it veto powers.

Montebourg said the government had used a new decree on foreign investments in strategic sectors to get the best deal from GE in terms of jobs, energy independence and maintenance of decision-making headquarters in France.

Alstom's board of directors is to make an announcement on the rival offers by Monday. The company's Chief Executive Patrick Kron also favors a deal with GE.

uhe/kpc (AFP, Reuters, dpa)