UPDATE 2-EU to take Germany to court over VW Law - source

(Adds Porsche, VW and government reaction)

BRUSSELS, June 4 (Reuters) - The European Commission will take Germany back to the European Union's top court over the way it plans to amend a law that shields carmaker Volkswagen (VOWG.DE) from takeover, an EU source said.

"They will be taken back to the court," the source said on Wednesday on condition of anonymity.

The EU executive will make an announcement on Thursday.

The European Court of Justice ruled last year that the so-called VW Law in place since the company's privatisation violated EU rules on the free flow of capital.

Rival carmaker Porsche (PSHG_p.DE) wants to take control of Volkswagen but a draft amendment to the VW Law preserves the state of Lower Saxony's blocking minority in VW.

The EU executive's decision to take Berlin back to court is a victory for the management of Stuttgart-based Porsche, which wants to raise its 31 percent holding in VW and seize majority control.

Porsche has repeatedly said the EU court ruling rendered the VW Law invalid and it should therefore be scrapped entirely.

"Our stance in unchanged," a Porsche spokesman said.

German government officials and VW declined to comment.

German Justice Minister Brigitte Zypries, speaking to a crowd of VW workers at the carmaker's Wolfsburg plant last month, urged Brussels to back down.

Zypries has said EU Internal Market Commissioner Charlie McCreevy was "skating on very thin ice" with any plans to take Germany back to court.

Volkswagen employs more than 80,000 in Lower Saxony, and the unions have fought hard to keep the special rules governing their company and prevent Porsche from seizing control. (Reporting by Huw Jones; Additional reporting by Mike Shields in Frankfurt and Erik Kirschbaum in Berlin; Editing by Dale Hudson and David Cowell)