The German state of Lower Saxony sees growing chances to wrest control in the merger of carmakers VW and Porsche from the Porsche and Piech families, a German magazine reported on Saturday.

Porsche's heavy debt of more than 10 billion euros ($14 billion) has undermined the value of the sports car maker, so that the family owners are likely to wind up with a stake of not more than 40 percent in the merged company, WirtschaftsWoche magazine reported, citing a sources close to the Porsche owners.

The families had been expected to take a stake of around half in the new company, the magazine cited sources close to VW as saying.

Lower Saxony's premier Christian Wulff expected the family owners to hold no more than 39.5 percent in the merged firm, WirtschaftsWoche said, citing sources close to the merger talks.

Wulff's plan foresees Lower Saxony holding a 20 percent stake, while Qatar would take 19.5 percent, the magazine said.

The remaining 21 percent stake would be in free float.

Lower Saxony and Qatar have formed a non-aggression pact to cooperate with their stakes, the magazine cited sources close to VW as saying.

However, Wulff also planned to buy an additional share in the merged company, giving the pact shareholders a slight majority relative to the family owners, the magazine said.

A Porsche spokesman described the magazine's story as speculation, adding that the stakes of the big shareholders in the new company ultimately depended on valuations that were currently being determined.

The office of Lower Saxony's premier declined comment, WirtschaftsWoche said.

Volkswagen was expected to approve plans on August 13 for a reverse takeover of Porsche that would make it the 10th brand in its stable when a deal is complete in about two years time.

WirtschaftsWoche also reported that Porsche's financial straits prompted it to consider allowing Volkswagen Bank to take over the running of Porsche's leasing business.

The Porsche spokesman said that Porsche's liquidity situation had already improved following its writedowns on the value of its VW stock hedges.

More steps will follow, the spokesman said.

Porsche SE said last week it expected an annual pretax loss of up to 5 billion euros due to the writedowns.

(Additional reporting by Hendrik Sackmann)

Volkswagen Germany