French parliament seals post office change

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PARIS, Jan 12 (Reuters) - The French parliament voted on Tuesday to change the status of the post office into a publicly owned limited company after a long battle with unions who fear the move is a first step towards privatisation.

The government says the change of status is needed to prepare La Poste for the opening up of the European postal services market next year but denies it is considering selling the post office operator to private investors.

The law is scheduled to come into force on March 1.

"This is a project for the reform and future of La Poste," Industry Minister Christian Estrosi said. "It retains its identity and its 100 percent public ownership."

However the opposition Socialist party has already said it will refer the law to the constitutional council, France's top legal watchdog, which can reject legislation if it judges it is not in conformity with the constitution.

Postal workers held repeated protests last year against the measure, which the government says is needed to open up new sources of funding for La Poste and prepare for European Union postal liberalisation.

The government has said it will provide a capital injection of 2.7 billion euros ($4 billion), directly and via state-owned bank Caisse des Depots (CDC), which La Poste says it needs to become more competitive.

La Poste, with its distinctive blue and yellow insignia, employs more than 250,000 people and is one of the best-loved and most recognisable institutions in France.

It has hitherto had the status of an "autonomous public operator" directly supervised by the industry minister.

La Poste said last year it was considering opening up its capital to private investors and asked to be allowed to change its status to that of a limited company to enable the move.

It had planned to raise 2.5-3 billion euros from selling shares before the plan was abandoned when the global financial crisis broke in 2008.

The decision to drop the sale plans left the group looking for replacement funding to allow it to compete with aggressive international rivals such as United Parcel Service and privatised German post office operator Deutsche Post . (Writing by James Mackenzie; editing by Robin Pomeroy)