PARIS - Incoming EDF chief executive Henri Proglio said he wanted to increase EDF's stake in his previous company Veolia Environnement without merging the two companies, according to a newspaper report. EDF, Europe's biggest power generator and operator of France's 58 nuclear reactors, should become a partner in the development of Veolia, Proglio told Les Echos on Monday, his first day in his new post.

Proglio's appointment has sparked controversy because he plans to remain non-executive chairman at Veolia, the world's biggest water company.

He said his priorities at EDF included fighting government plans to reform the sector and foster more competition. EDF produces roughly 80 percent of France's electrical output.

I said: 'no'. If we do this the company won't be worth anything, Proglio was reported as saying.

He also said he wanted to improve the company's competence in engineering and better manage its nuclear power plants. With only 78 percent of EDF's power production available, the plants are lagging competitors.

Last week Proglio shocked the market when he suggested that EDF could play a stronger role in the management of Areva and that the creation of a French nuclear reactor maker was probably an error.

French Finance Minster Christine Lagarde reponded by saying that Areva had significant expansion plans and that everyone should focus on their own dossiers. (Reporting by Nina Sovich; Editing by David Cowell)