HANOVER, Germany - Volkswagen's second-biggest shareholder, the state of Lower Saxony, pushed to break the deadlock in merger talks with Porsche, saying it is looking for a clarity over the matter this week.

Porsche racked up 9 billion euros ($12.59 billion) of debt trying to swallow its much bigger rival Volkswagen before the financial crisis turned the tables and threatened to unravel the deal.

Shareholders in both companies are now on tenterhooks, waiting for the outcome of talks between the luxury carmaker and Qatar about selling a stake, a move that could stabilise Porsche and save a takeover deal.

Christian Wulff, the premier of the state of Lower Saxony, signalled a final drive in the difficult negotiations between both companies, saying he wished for clarity on the issue by the time of VW unit Audi's centenerary celebrations on Thursday.

We want an integrated group of Volkswagen and Porsche... but everyone involved has to want it, Wulff told reporters on Tuesday.

Sooner or later a decision has to be made and that time has come.

He said he expected there would be a supervisory board meeting of Volkswagen around July 22 or 23.

Porsche's board is set to met on July 23.

Wulff also dismissed reports that VW has improved its offer for almost half of Porsche's wholly owned sports car business.

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