Former British finance minister Alistair Darling on Friday criticized the structure of the proposed merger of defense and aerospace firms BAE and EADS as flawed because the French and German governments might have larger equity stakes than the British government.

German and French governments currently each hold an indirect stake of 22.25 percent in EADS, and are reported to be seeking a level of about 9 percent each.

However, Darling regards this as too high because the British government is not seeking an equity stake in the proposed merged firm.

"I don't see how you could have a large new company like this with the French and German governments having direct and indirect stakes and we (the British) have none," Darling said in an interview with the Financial Times newspaper.

"I would prefer that all three governments had minimal stakes. There is a danger that decisions in the defence and commercial businesses could be taken on the basis of politics rather than what is best," he added.

The proposed merger between the two major European businesses would create the world's largest military manufacturer, worth 29 billion pounds (about 63 billion U.S. dollars) able to compete on equal terms with the United States firm Boeing.