France could use a support mechanism set up at the height of the banking crisis in 2008 to shore up the capital bases of French banks in case of an extraordinary event, Christian Noyer, head of the Bank of France, told a French newspaper.

Noyer, also a member of the European Central Bank's governing council, told Le Journal du Dimanche (JDD) that French banks did not need to be recapitalized but could seek support from a public entity if they deemed it necessary.

Asked to comment on a report in the same newspaper, which alleged that France's government had discussed a plan to inject 10 to 15 billion euros into the French banking system, he said: There is no plan, and we don't need one.

They (the banks) are very solid. They have a solid capital base, comparable to other European banks and they are profitable ... None of them is hiding any toxic assets.

He added, however, that banks could appeal to a public entity set up in 2008 under a broader plan to support the French banking sector soon after the collapse of U.S. investment bank Lehman Brothers.

The only thing that exists is the mechanism from 2008 ... If there was an extraordinary event, this mechanism is in place, he said.

At the time the French state had made 360 billion euros available to banks, 40 billion of which was for strengthening their capital base and 320 billion of which would help them refinance via a public entity called the SFEF (Company for Financing the French Economy).

France's finance ministry said it categorically denied any suggestion that France was planning to activate public support for the banking sector.

Noyer's comments follow a sharp drop in the share prices of French banks that fed speculation that the French state may have to intervene and recapitalise them, in the same way that other governments were forced to help their lenders during the original global banking crisis.

Both BNP Paribas and Societe Generale have pledged to sell tens of billions of euros of assets to free up capital. A source in Qatar said last week that BNP Paribas was in talks with the Gulf state over a possible stake sale.

The bank has denied there have been such talks.

SECRET MEETING

Newspaper Le Journal du Dimanche, citing sources in French banks and close to the president's office, said that the French state had considered injecting between 10 and 15 billion euros of public money into its banks at a secret meeting at France's Treasury on September 11.

At the meeting, which the JDD said was attended by the head of France's Treasury and the chief executives of French banks including Societe Generale, BNP Paribas and Credit Agricole , French officials offered to support the banks in the same way it had done in 2008.

According to the JDD, the embattled head of Societe Generale had accepted the offer on condition that all the other banks at the meeting followed suit.

However, BNP refused to show solidarity, burying the project outright, the paper said, adding that other schemes ranging from straightforward loans to the sale of preference shares with warrants had been discussed.

Banking sources told Reuters this week that early talks exploring the possibility of state support for French banks had taken place.

BNP Paribas, Societe Generale and Credit Agricole all declined to comment on the report. The French Treasury had no immediate comment.

(Reporting by Jean-Baptiste Vey, Lionel Laurent and Nicholas Vinocur; Editing by Greg Mahlich; Editing by Greg Mahlich)

BNP Paribas