THERE would be no shortage of potential buyers for Woodchester Investments edit Lyonnais decided to sell its 53 per cent stake in the Irish firm, Mr Craig McKinney, Woodchester's chairman said yesterday.

Each time Credit Lyonnais has been approached, it has advised Woodchester on the identity of the interested party. "So I can speak with some authority on the subject," he said.

Mr McKinney also stressed that if Credit Lyonnais, which is a French State controlled bank, decided to sell, or was forced to sell, then this would precipitate a mandatory bid for the group. However, he reiterated, that Credit Lyonnais was enthusiastic about Woodchester's activities. Noting that Woodchester's own financial ratios were very strong, he stressed that the French bank's financial difficulties were not inhibiting Woodchester's own growth.

In a separate development, the business daily, La Tribune, yesterday reported that the French government had written to the European Commission outlining plans to soften terms of last year's state bailout of Credit Lyonnais which was causing the bank great financial difficulties.

The report said a letter from the French government outlined its plans to alleviate the bank's financial burden.

The root of the problem, the report said, was a 119 billion French franc (£14.3 billion) loan, the bank made to a state-backed vehicle that took over Ffr130 billion of its shaky assets in a clean-up of its balance sheet. The French government forced the bank to make the loan at below market interest rates.

It now wants that loan to be either cancelled or to be charged at a higher rate of interest. In return, the report said, the bank could be forced to sell more of its European investments, together with the 35 per cent of its foreign assets demanded by the EU in exchange for its approval of the last rescue.

Credit Lyonnais's next results are due out at the end of this month when the outcome of its discussions with the French Government are expected to be announced.