The French government has given the green light for the privatisation of the debt-ridden Credit Lyonnais, ending a six-year saga which has cost taxpayers $26 billion (€23.8 million).

A decree published in the Official Journal authorised "the transfer to the private sector of the majority stake held directly or indirectly by the state in the Credit Lyonnais company."

The specifics of the deal, including creation of a core group of shareholding companies to hold between 30 and 33 per cent of the bank, are expected to be made public "towards the end of the month".

The finance ministry announced yesterday that the core group altogether would hold less than 33 per cent - which constitutes a blocking minority.

The ministry said it would authorise each of the core shareholders to hold between 1 and 10 per cent of the bank's capital but they will have to "sign a pledge of stability" before buying a stake.

It added that the core shareholders would pay a price slightly higher than the market rate institutional investors will pay.

The remainder of the capital, excluding the 10 per cent the state will keep, will be sold on the market, if conditions permit, by the end of the first half of the year, the ministry added.

That leaves some 60 per cent of the bank's capital to the public - individual and institutional investors and employees.

The comments came after a hectic week in Paris's banking world, with Banque Nationale de Paris proposing to take over Paribas and Societe Generale, which announced their own merger recently.

Despite the week's shakeups, the finance ministry maintained its commitment to a core group of shareholders meant to "cushion Lyonnais in its development and its capacity to take part in" the banking sector's "evolution".

The core group "will be composed of shareholders who have, or propose to have, co-operation accords with Credit Lyonnais allowing this goal to be achieved," the ministry added.

The market sale should allow "all the investors who are interested, especially individuals, to be associated with the development of Credit Lyonnais after its privatisation," the ministry said.

But unions at the bank yesterday criticised the state for publishing the decree so quickly when "all of the union organisations wanted the process to be frozen," a union statement said.

The statement also cited employees' worries for the future.

The finance ministry said Finance Minister Mr Dominique Strauss-Kahn planned to meet unions and soothe employees' fears by explaining the "significant" amount of shares they will have the option to buy. Today the bank concentrates on high-street banking in France and on large investments abroad. The government decide in July 1995 to privatise the bank and said on Saturday the decision had "never been questioned".