UPDATE 4-Suez and GDF resume weekend talks on delayed merger

(Recasts with second union comment)

By Swaha Pattanaik and Gerard Bon

PARIS, Sept 1 (Reuters) - Suez (LYOE.PA: Quote, Profile, Research, Stock Buzz) and Gaz de France GAZ.PA resumed talks on Saturday to try to reach a deal on a 90-billion-euro ($122.9 billion) merger, with a union official saying the two utilities would hold board meetings on Sunday.

Suez has, according to sources close to the situation, bowed to pressure from French President Nicolas Sarkozy to split its business and shed part of its historic water assets to salvage a merger agreement with state-controlled GDF.

The endgame now appeared to be in sight, trade unions said.

"The two board meetings have been called on Sunday, for GDF it is 1800 (local time, 1600 GMT), for Suez I don't know," an official at FO trade union told Reuters.

The CGT union, whose representative met Sarkozy at the Lanterne lodge near the Palace of Versailles on Saturday, said it had been given signs the firms were making progress in talks.

"The boards were informed that they will be called, that it (a meeting of the boards) was in the process of being prepared," the CGT official told Reuters after the meeting. "We have confirmation that things are in the process of being prepared."

GDF declined to comment. Suez was not immediately available.