The Russian government will allow the Renault to increase its stake in troubled AvtoVAZ as part of a rescue plan for the heavily-indebted maker of Ladas.

Previously Moscow had ruled out the possibility of Renault increasing its stake beyond the 25% it currently holds.

But First Deputy Prime Minister Igor Shuvalov told reporters, "We understand that our work to clear the debts of AvtoVAZ should be considered jointly with the potential possibilities of Renault-Nissan as an investor. Then these measures taken together make real sense."

He added that currently there are no plans to convert AvtoVAZ's debt into shares.

The rescue plan for AvtoVAZ will be discussed by Moscow on 20 November.