* Lauvergeon had clashed with EDF head Proglio
* Japan disaster had revived prospects
* Oursel tasked with turnaround plan
* Government cites experience, nuclear knowledge (Adds additional background, insider quote)
By Christian Plumb and Marie Maitre
PARIS, June 16 The French government on Thursday said it planned to replace Anne Lauvergeon as chief executive of nuclear group Areva (AREVA.PA), putting an end to weeks of speculation and controversy about the state-owned company's management.
Lauvergeon, one of France's best known executives, will be replaced by Luc Oursel, who headed Areva's nuclear reactor business before joining Lauvergeon's executive board as chief operating officer in charge of international, marketing and projects.
The government cited Oursel's industrial experience and his knowledge of the nuclear industry gained in working at Areva, whose executive board he joined in 2007.
Lauvergeon had come under fire after cost overruns at a project in Finland, the loss of a huge deal in Abu Dhabi, and a public spat with Henri Proglio, the head of state utility EDF (EDF.PA) and seen as close to President Nicolas Sarkozy.
Areva is the world's largest builder of nuclear reactors and represents a bid by France to capitalize on its atomic energy expertise -- Europe's second-largest economy gets some 80 percent of its power needs from 58 nuclear reactors -- by selling it abroad. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Special Report on the nuclear sales race [ID:nLDE73D29O]
Graphic on nuclear industry: link.reuters.com/dyz78r
Newsmaker on Lauvergeon: [ID:nLDE7171WD] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Baptized "Atomic Anne" by the French media, Lauvergeon was a regular in Forbes' list of the world's most powerful women. Her prospects for reappointment after her term expired on June 29 had seemed to improve after Japan's nuclear disaster seemed to validate her focus on pricier reactors with added safety features.
But speculation had increased in recent days that Sarkozy would replace the the outspoken CEO and replace her with someone likelier to submit to EDF's wishes.
Lauvergeon was fired even after virtually all members of Areva's executive board urged her reappointment, calling her the only person with the "skills and qualities needed to lead Areva in the years to come." [ID:nLDE75F21I]
In addition, a group of 20 French parliamentarians of all parties signed a petition on Thursday calling for Lauvergeon to keep her job, saying her reappointment would guarantee Areva retains its role of leading nuclear group in the world.
Oursel will be mandated with putting in place a plan to improve Areva's performance by boosting its competitiveness and bolstering its development, according to a statement from the office of Prime Minister Francois Fillon.
The decision on Areva could help put a floor under the company's stock, which has plunged 18 percent since the start of June as managerial instability compounded an uncertain business outlook following Japan's Fukushima catastrophe.
Italians overwhelmingly rejected a move to restart nuclear power earlier this week, the latest bad news for Areva, which was also hit by Germany's recent decision to shut down its nuclear plants in the coming years.
The 51 year old Oursel -- a graduate from the elite school Mines -- had been seen by some industry experts as a compromise between those who wanted Lauvergeon renewed and those advocating a radical change.
Oursel is unlikely to dismantle what Lauvergeon built: a one-stop nuclear shop from mining and enrichment to reactors and waste recycling -- an integrated business model which EDF's Proglio once called "a mistake."
Proglio has also called, and obtained from the government, permission to lead the French nuclear industry in bids abroad -- a move opposed by Lauvergeon, who pointed out that many of her group's clients were EDF rivals.
Industry sources said Oursel, who worked at Schneider Electric (SCHN.PA) and logistics firm Geodis before joining Areva, had a reasonably good grip on nuclear issues compared to some potential candidates.
"I wouldn't say the technical team is overjoyed with this," said one source at Areva. "Oursel is not really a nuclear engineer. On the other hand, if it is him, there is at least continuity for the clients, and he does probably know more about nuclear than most other people Sarkozy would be able to choose." (Additional reporting by Lionel Laurent)