The European Parliament on Friday condemned Argentina's decision to expropriate a controlling stake in oil company YPF from Spanish-owned Repsol and urged the executive European Commission to consider reprisals.

In a resolution approved by a vote of 458 to 71, politicians deplored the decision by Argentine President Cristina Fernandez, calling it unilateral and arbitrary.

Madrid has already threatened retaliation over the move and a senior Spanish official said on Thursday the European Union would intervene on Spain's behalf over the seizure.

The parliament urged the Commission to use all the available settlement tools within the World Trade Organisation and G20 to react to the seizure, which it said failed to follow the country's obligations stemming from international agreements.

The nationalisation could affect talks underway on a trade deal between the EU and the Mercosur bloc of Latin American countries led by Brazil and Argentina, as well as the system of preferential tariffs Argentina benefits from in dealing with the EU, the resolution said.

Referring to the deep friendship which links the EU and the Argentine Republic, the parliament also urged Fernandez's government to renew dialogue and negotiation.

(This version of the story was corrected in the fifth paragraph to clarify that preferential tariffs in place apply to Argentina specifically and not the Mercosur trade zone.)

(Reporting by Gilbert Reilhac; Writing by Christian Plumb; Editing by Mark Potter)