Bavaria's Chief Minister Markus Soeder had said in January, before taking office, that he would look into the possibility of selling the stake - now worth around 300 million euros (£261.8 million) - to pay for a public housing programme.

But a source familiar with the matter said this project could now be funded without raising cash from the E.ON stake.

Germany's top two utilities on March 11 announced plans to break up Innogy, in a landmark deal that was welcomed by investors, sending shares in the companies involved sharply higher.

(Reporting by Joern Poltz; Writing by Douglas Busvine; Editing by Edmund Blair)

Stocks treated in this article : RWE, innogy SE