If they go ahead as planned the newly merged banking group would be the second biggest retail bank in the country, following Credit Agricole with some 480bn euros in deposits.
Finance Minister Lagarde also indicated that the state might become a direct shareholder of the merged banks.
Caisse d'Epargne and Banque Populaire have experienced great difficulties recently due to large losses at their investment subsidiary Natixis.
Natixis admitted last December it stood to lose up to 450m euros, because of the alleged fraud that centred around investor Bernard Madoff.
And also, at the end of October 2008, French police arrested and held a rogue trader because of the loss of 751m euros at the Caisse d'Epargne bank.
