UPDATE 1-Credit Agricole may quintuple Resona stake-paper

(Adds comment from Resona spokesman)

TOKYO, May 4 (Reuters) - Credit Agricole SA (CAGR.PA) may raise its stake in Japan's Resona Holdings Inc (8308.T) to up to around 5 percent from just under 1 percent, a Japanese newspaper reported on Sunday.

The additional investment may reach around 100 billion yen, and the French bank may acquire shares in Resona from the Japanese government, the Asahi Shimbun newspaper reported.

Resona spokesman Masaki Maekawa said nothing had been decided on the size or timing of the possible deal. No one at Credit Agricole could be immediately reached for comment.

Credit Agricole said last week it would consider raising its stake in Resona, as it looks to expand its position in the world's second-largest economy.

The French bank won a regulatory approval last year to enter the Japanese life insurance market, aiming to tap growing demand for variable annuities and other retirement products.

Credit Agricole and Resona, which have been cooperating since 2002 in asset management and selling investment products, said in a statement they will expand their alliance to include insurance products and investment banking.

Resona is Japan's fourth-largest bank, with a network of about 600 outlets across the country. (Reporting by Nathan Layne and Yuzo Saeki; Editing by Louise Heavens)