British defense secretary Philip Hammond said Monday that the British government would use its shares in BAE to oppose a merger with aerospace firm EADS unless the French government reduced its stake in the business.

Hammond said in an interview with the BBC, "our position is that they (the French government) will have to make a considerable reduction in their stake."

"It has to be below a certain level, putting them on a par with big institutional investors who will also own significant single-digit percentage stakes in the merged group," Hammond added.

The French government currently holds a 15 percent stake in EADS, whose principal business is the construction of the Airbus family of planes.

The Financial Times reported on Saturday that talks between the British, French and German governments about what size of shareholding national governments should have in the proposed BAE/EADS had reached an impasse. Nevertheless, talks between the three governments continued on Monday.

A deadline of 4:00 p.m. London time (1500 GMT) on Wednesday has been set by the British stock market for the merger between the two European firms to be completed.

Hammond said he believed there was no possibility of that deadline being met.

The merger would create a firm worth 27.9 billion pounds (about 45 billion U.S. dollars) which would be the largest military equipment manufacturer in the world, and give BAE access to EADS civil aviation expertise and EADS access to BAE's military equipment business.