* French industry minister eyes EDF, GDF Suez stake sales
* Finance minister plays down possible stake sales
* Shares unchanged; sale could raise 4.2 billion euros.
* Funds could go to other industries - government source (Adds valuation, impact on companies,)
By Geert De Clercq and Jean-Baptiste Vey
PARIS, April 15 (Reuters) - The French government could raise as much as 4.2 billion euros ($5.5 billion) by trimming its stakes in utilities EDF and GDF Suez, money it may invest in other industries to boost the economy.
Without directly identifying either company except by the size of the national stake in each, French industry minister Arnaud Montebourg on Sunday raised the idea of reducing that in electricity utility EDF to 75 percent from 84.4 percent, and in gas utility GDF Suez to 33 from 36.7 percent.
"We are in the process of looking at what would be possible," a senior government source said, adding the goal would be to invest in new industries rather than plug budget gaps.
In March, France raised nearly half a billion euros from the sale of a 3.12 percent stake in aerospace group Safran with a view to inject the funds into small businesses. The sale left the state with 27 percent in the firm.
France owns around 55 billion euros' worth of stakes in listed companies, but socialist French President Francois Hollande has made little mention of asset sales.
This is the second time Montebourg, one of the government's most left-wing ministers and noted for expressing dissident views, has spoken about partial privatisations without a swift government denial.
Finance minister Pierre Moscovici, interviewed on state radio earlier, did not mention possible stake sales, but a source close to him said there was no particular plan to sell and only the finance ministry had authority over such disposals.
"If the state considers some assets are not strategic and could be sold to finance other investments that would be beneficial to the economy, there is nothing to stop us from doing that," the source said on Monday.
A 10 percent stake in EDF, at current prices, would raise about 3 billion euros, while a 3 percent stake in GDF Suez would raise about 1.2 billion euros.
Both shares barely moved on Montebourg's comments. EDF closed up 0.1 percent, GDF Suez down 0.1 percent. The CAC40 index was down 0.5 percent.
Some analysts say a selloff of French state utility holdings would look like a panic measure. EDF stock is down 81 percent from its 2007 high, while GDF Suez is down 64 percent from a 2008 high, despite slight recoveries in recent weeks.
While Europe's bourses are at their highest levels since early 2009, utilities have been among the worst performers.
GDF Suez shares are trading at just 65 percent of book value, the worst in the Euro Stoxx Utilities Index.
Power demand is falling because of the economic crisis and the drive for energy efficiency, utilities are carrying billions of debt following a wave of consolidation, and the renewable energy boom is damaging their business model.
"This may not be a good time to sell, but frankly, because of regulation and falling consumption, there is not much good news in the pipeline for the sector," said Colette Lewiner, head of utilities at French consultancy firm CapGemini.
The government needs to keep 33.33 percent in GDF Suez to retain a blocking minority against changing company statutes or capital operations. But it could further reduce its EDF stake, as by law it needs to own a minimum 70 percent.
For the companies, the size of government stakes is less important than government regulation, because their earnings depend strongly on regulated tariffs for gas and electricity.
But "(Montebourg's) comments will weigh on the stock price, as it means there will be an overhang of paper," said Julien Desmaretz at broker Bryan, Garnier & Co. ($1 = 0.7635 euros) (Additional reporting by Benjamin Mallet and Catherine Bremer/Ruth Pitchford; Writing by Geert De Clercq; Editing by Ruth Pitchford)