* French PM meets Areva and EDF heads over public sniping
* PM says Areva, EDF to find terms of disputed contract soon
* PM asked CEOs to be partners, no rivals-sources
* EDF's Proglio has called Areva's model an "error"
* Areva briefly stopped collecting EDF's spent nuclear fuel (Recasts with PM statement)
By Marie Maitre
PARIS, Jan 20 (Reuters) - French Prime Minister Francois Fillon summoned the heads of state-controlled groups EDF and Areva on Wednesday, calling on the chief executives to stop sniping at each other in public.
Henri Proglio and Anne Lauvergeon have been at odds with each other since Proglio, who took over EDF in November, said the creation of nuclear fuel, reactors and waste recycling group Areva by Lauvergeon in 2001 was "probably an error".
Strategy disagreements between the two outspoken executives turned to public hostility in recent days after Areva suspended deliveries of nuclear fuel to and the collection of waste from EDF after the expiry of a deadline to renew a contract.
EDF, the world's biggest nuclear power producer, runs 58 reactors in France, covering 80 percent of the country's electricity needs.
During their meeting with Fillon, Areva confirmed it had resumed the collection of spent nuclear fuel at EDF's power plants, Fillon's office said in a statement, adding that the companies had two weeks to set the terms of a new contract.
Although the statement made no mention of it, Fillon also used the meeting to defuse a personality clash at the helm of France's nuclear industry that threatens the country's ambitions to play a leading role in a global atomic energy renaissance.
"The government, as the leader of the nuclear industry, will remind them that they are partners and not competitors. There cannot be competition between partners," a source close to Fillon told Reuters. "Their fates are tied. There is no alternative solution. They have to get along."
Spokeswomen at Areva and EDF had declined to say what would be discussed at the meeting.
ATOMIC ANNE VS. POWERFUL PROGLIO
Sources within Areva have sought to play down talk of a personal conflict between Proglio and Lauvergeon, the feisty 50-year old CEO dubbed "Atomic Anne" by the media and ranked among the world's top 10 most influential women by Forbes.
"We don't think there is a rivalry as described by the press. We think there are some disagreements," said one source, who however added: "Some people are telling us 'She is attacking him aggressively' but we are saying 'who started the whole thing? He did, even before his appointment (at EDF)."
Proglio, the 60-year son of fruit and vegetable sellers, who rose to the top of France's corporate elite and is said to be close to President Nicolas Sarkozy , has called for a break up of Areva and for EDF to lead the nuclear sector.
His comments, made on the eve of his appointment at EDF, were rebuffed by Economy Minister Christine Lagarde, who advised him to focus on his own challenges at EDF, and by Fillon, who said the French state alone was heading the nuclear industry.
The comments also came at a time when Lauvergeon was seen as having fallen out of favour with Sarkozy, as Areva struggled with project delays in Finland and the sudden exit of Siemens from a Franco-German nuclear reactor joint venture.
Proglio and Lauvergeon found more ground to disagree on when a French consortium, which included them as well as GDF Suez and oil group Total, lost a $40 billion nuclear project in Abu Dhabi.
Proglio blamed the loss of the landmark deal on the weak leadership of the French nuclear industry, while Lauvergeon pointed at EDF dragging its feet over joining the project.
"The Emiratis wanted EDF to join the consortium. This took several months," Lauvergeon told newspaper Le Monde on Tuesday.
Asked by Le Monde if she felt weakened, she said:
"This is distressing to see that industrial issues are brought back to personal issues. In the past 10 years, I have gone from one extreme to the other: one of the world's most powerful women one day and a weakened woman the next one."
"I am neither one nor the other."