UPDATE 1-Sale of Dutch Fortis bank not an option - finmin

(Adds details, responses from banks)

By Aaron Gray-Block

AMSTERDAM Oct 23 (Reuters) - The Dutch government has no intention of selling the Dutch banking operation of Fortis FOR.AS and will proceed with its planned integration with ABN AMRO, a Finance Ministry spokesman said on Thursday.

The spokesman was responding to comments made by Dutch trade union De Unie urging the government to consider the sale of Fortis Bank Nederland to BNP Paribas (BNPP.PA) following its nationalisation by the government earlier this month.

"That is not an option," the spokesman said. He said current market conditions were not conducive to a sale of banking operations and that the government would integrate Fortis with ABN AMRO as planned.

Both BNP Paribas and Fortis declined to comment.

Belgian-Dutch bancassurer Fortis, which bought ABN AMRO last year, was broken up earlier this month, partly nationalised by the Dutch government and partly sold off to French rival BNP Paribas after investors and customers lost confidence in the group as the credit crisis deepened.

Citing De Unie, Dutch newspaper De Financiele Telegraaf said on Thursday that Dutch Fortis Bank was seriously considering the possibility of its sale to BNP Paribas as an alternative to its integration with ABN AMRO.

Jacques Teuwen, the chairman of De Unie, told Reuters a group of Dutch Fortis Bank managers had drawn up the scenario as an alternative to the banks' integration and that the union wanted to discuss the option with the government.

"We want the Dutch government to investigate this," he said.

He said the sale of Dutch Fortis Bank to BNP Paribas could save 8,000 jobs and provide more choice to Dutch retail banking customers and businesses while also strengthening Amsterdam as a leading financial centre.

That plan would require the government buying back ABN AMRO's international business from Royal Bank of Scotland (RBS.L) to give ABN AMRO growth potential, and halting the sale of various ABN AMRO operations to Deutsche Bank (DBKGn.DE).

The government is meeting on Thursday with De Unie, trade unions FNV and CNV and the works councils from both Fortis and ABN AMRO to discuss the future of the Dutch banks.

(Editing by Elaine Hardcastle)