French utility Veolia Environnement SA's (VIE.FR) board invited the company's current Chairman and Chief Executive Henri Proglio to remain non-executive chairman of the group or chairman of the supervisory board if he is appointed to the helm of Electricite de France (EDF.FR).

Veolia's board, which met late Monday, also said it would prefer to find an internal replacement for Proglio as CEO, if he is appointed as Chairman and CEO of French state-controlled power group EDF at EDF's shareholders meeting on Nov.5.

The board also asked Veolia's nominations and compensation committee to consider "the consequences of this possible appointment," and to make recommendations with respect to Veolia Environnement's corporate governance and management team in the next few weeks.

The French Prime minister's office late Sunday said the government backs Proglio to become the new head of EDF, following an EDF board meeting at which current CEO Pierre Gadonneix wasn't nominated to remain as a director.

The French state owns 85% of EDF.

Gadonneix' current term as the head of EDF expires Nov. 22.

Proglio already has a seat on the board of EDF, and there are already links between the two companies. There has been much speculation that Proglio will want to strengthen ties between EDF and Veolia.

Company Web site: www.veolia.com

- By Geraldine Amiel, Dow Jones Newswires; +33 1 40171740; geraldine.amiel@dowjones.com;