UPDATE 1-Italease says DZ Bank won't take direct stake in it

(Adds details, background)

MILAN, July 22 (Reuters) - DZ Bank (DGBGg.F) is not planning to buy a stake in Banca Italease BIL.MI at present, the Italian bank said on Tuesday, as it confirmed talks with the German bank focused instead on a leasing joint venture.

"Such negotiations do not contemplate the direct investment of companies (which are) part of DZ Bank Group in Banca Italease's share capital," the Italian leasing company said in a statement. DZ Bank said on Monday it hoped to set up a leasing and factoring joint venture with Italease by mid-September, adding closer ties in areas such as asset management could be possible.

Confirming a report in the Italian press, in May a source close to the matter had told Reuters DZ Bank was interested in buying a stake in Banca Italease.

Shares in Italease jumped 17.5 percent on Monday on the prospect the joint venture would help it lower the cost of funding.

Hit by massive derivative-linked losses last year, Italease restructured and returned to profit in the first quarter of 2008.

By 1107 GMT, shares in Italease had lost 3.83 percent to 6.135 euros while Milan's share index MIBTEL .MIBTEL was down 1.17 percent. Italease said in the statement it was holding exclusive talks with DZ Bank's unit VR Leasing to create a joint venture and it expected to complete an analysis on the feasibility of the project at the beginning of September.

Sources with direct knowledge of the talks have said DZ Bank would control 51 percent of the joint venture.

One of Italy's biggest leasing companies, Italease is 30.7 percent owned by Banco Popolare (BAPO.MI). Shares in the Italian bank had lost 2.31 percent at 11.31 euros against a 3.97 percent fall in the DJ Stoxx index of European banks .SX7P.

(Reporting by Valentina Za)