Reports in the media suggest that Italian power incumbent Enel is set to drop its claim on the French utility Suez in favor of a negotiated purchase of assets in Belgium.

The French newspaper Les Echos has reported that Enel is preparing a bid for some or all of Suez’s Belgian assets – including electricity group Electrabel or gas supplier Distrigas – to be undertaken once Suez’s controversial merger with Gaz de France has gone through.

This, the reports say, would mark a return to Enel’s earlier stance before a hostile French reaction prompted an all-out bid for Suez. That bid in turn triggered accusations of protectionism from Rome when the French government orchestrated a tie-up between GdF and Suez.

Now, despite Enel recently filing a set of objections to the GdF deal with the European competition commissioner Neelie Kroes, it seems that much of the outright antipathy between the French and Italians has now subsided. The French president Jacques Chirac is set to meet with his recently-elected Italian counterpart Romano Prodi on June 13, with the Suez affair likely to appear on the agenda.

The climate is less tense and less confrontational. We are waiting for a signal from Jacques Chirac. In case of an agreement on all or some of Electrabel’s units, there will be no need for a bid (on Suez), Les Echos quoted an Enel source as saying.