LUXEMBOURG, Oct 5, 2008 (AFP) - French bank BNP Paribas will take control of ailing finance group Fortis's operations in Belgium and Luxembourg, with both governments retaining a stake, a source close to the Luxembourg government said Sunday.

An agreement was reached after a weekend of talks between the parties under which France's biggest bank will take up 75 percent of Fortis's Belgian operation leaving the other 25 percent, a blocking minority, in the hands of the Belgian government.

On the Luxembourg side, BNP Paribas will take 66 percent of the shares leaving the Grand Duchy with 33 percent, the source said.

Fortis ran into liquidity problems which originated with the US-born financial crisis and Sunday's decision is the latest bid to reassure savers and staff alike.

On Friday the Dutch government totally renationalised the group's Dutch arm.

According to the website of the authoritative Belgian daily Le Tijd, the deal will be financed by BNP Paribas shares, in which Belgium's stake will rise to 10 percent, at an estimated value of 6.5 billion euros.

The Luxembourg source said the Luxembourg government will end up with 1.4 percent of the BNP Paribas group.

Also under the agreement Fortis Insurance Belgium and Fortis Investments would pass under the BNP Paribas umbrella, according to De Tijd.

BNP Paribas is the sort of big bank, relatively uninjured so far by the global financial firestorm, that the two governments had been hoping for as a suitor.

The moving of most of Fortis to one of Europe's biggest financial groups is just the latest episode in the efforts to save the Belgian-Dutch banking group.

Under an original, hastily arranged rescue deal a week earlier, Belgium, the Netherlands and Luxembourg announced a 11.2 billion euro (15.5 billion-dollar) part-nationalisation of Fortis to prevent the US-driven financial crisis from claiming another victim in Europe.

Belgium made the biggest contribution, taking a 49-percent stake in the Belgian arm of the company, for 4.7 billion euros.

Then on Friday the Dutch government announced it was totally nationalising the Dutch arm of the group.

That move left the Belgian and Luxembourg arms appearing weak, and there were fears of more freefall when the stock markets open on Monday.

Speaking on Belgian television earlier Sunday, Belgian Prime Minister Yves Leterme said his government was doing everything possible and was keen to reassure Fortis savers, clients and staff.

However, the Belgian leader had no such words of comfort for the bank's shareholders.

"Naturally that's different," he told RTBF television, when asked particularly about small shareholders.

"A shareholder in a company takes risks and therefore the state, the Belgian taxpayers cannot guarantee all the interests of all the shareholders of the whole economy."

Fortis, caught up in the US-born international financial crisis, has seen nearly 70 percent of its share value wiped out this year.

BNP Paribas' share capitalisation at Friday's close of trading was around 65 billion euros.

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