DaimlerChrysler has denied a newspaper report on Friday that management board member Manfred Bischoff will meet government officials on Monday to discuss the sale of its MTU aero engine unit, Reuters said.

“There will no meeting on Monday,” a spokesman for the company told the news agency, noting Bischoff was on holiday at that time.

Reuters said the Berliner Zeitung newspaper, citing unnamed government sources, reported that the chancellery has scheduled a meeting on Monday because it had misgivings about the sale of MTU to United States investors.

Chancellor Gerhard Schroeder said on Wednesday he would prefer to see the country’s defence firms stay in German hands, Reuters said, and the government has said it plans legislation giving it the right to review foreign investors’ purchases of German armaments firms.

Sources familiar with the planned sale of MTU told Reuters earlier this month DaimlerChrysler was in the final stages of finding a buyer for MTU after receiving a handful of formal bids.

US private equity groups the Carlyle group, Kohlberg Kravis Roberts (KKR), the Blackstone Group and UK buyout firm Doughty Hanson all put in bids that could value the business at around 1.5 billion euros ($US1.69 billion), the sources told the news agency.