THE French finance ministry has approached some European banks and financial institutions to see whether there are terms on which it could sell Credit Lyonnais, the troubled state«MDBO» «MDNM»owned bank.

Goldman Sachs, the US investment bank advising the French government on Credit Lyonnais, has contacted a number of big banks, including Barclays. It is thought to have been told that the bank is unsaleable in its current shape. Credit Lyonnais owns 54 per cent of Woodchester Bank in Ireland.

The French government, which has injected subsidies of 49 billion French francs (£5.8 billion) to rescue it from losses following its uncontrolled expansion in the 1980s, has said it intends to privatise the bank as rapidly as possible.

However, the banks approached are thought to have insisted that they would only consider taking control of Credit Lyonnais if they were free to reduce its domestic branch network and make many staff redundant.

The bank's chairman, Mr Jean Peyrelevade, said yesterday he thought it would take two years to get Credit Lyonnais into a position where it could be privatised, but its viability was "now assured".