Officials for GDF Suez and Areva confirmed that talks were under way. GDF Suez said no decision had been taken on a partnership accord.

Les Echos financial newspaper said the agreement was due to be signed last week but was held up over a dispute between Areva and EDF on nuclear waste treatment.

The cooperation deal would see GDF Suez join a project to build the Atmea medium-powered reactor that Areva is designing with Japan's Mitsubishi Heavy Industries, Les Echos said.

There would also be exchanges on engineering and training, it added.

The Atmea project comes after the French nuclear industry lost a major contract last month to build a medium-powered reactor in the United Arab Emirates to a South Korean firm.

Four of France's showcase high-powered EPR reactor are under construction -- one in Finland, two in China and one in the French Normandy region -- but the project has been plagued by delays.

The signing of the partnership deal was postponed after Areva and EDF were caught up in a public spat over the terms of a nuclear waste treatment contract.

The chief executives of the two companies were called in to Prime Minister Francois Fillon's office for talks and the government gave them two weeks to reach an agreement on the contract.

President Nicolas Sarkozy has asked the former head of EDF, Francois Roussely, to present a report by the end of April on the future of the French nuclear industry.

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