France's stake in the proposed EADS and BAE Group must be in the single digits if the deal is to go ahead, UK defence secretary Philip Hammond told BBC television on Monday.
"Our position is that they will have to make a considerable reduction in their stake," he said in an interview. "It has to be below a certain level, putting them on a par with big institutional investors who will also own significant single-digit percentage stakes in the merged group."
France has a 15 percent stake in EADS and under current arrangements could buy out industrial partner Lagardere, the French media firm which wants to sell its 7.5 percent stake.
Hammond added that there was no chance of the merger being completed by a deadline of 1600 GMT on Wednesday and that it would be up to the companies to ask for an extension.
(Reporting by Peter Griffiths; editing by Kate Holton)