* FTSEurofirst 300 index rises 0.8 percent
* Spanish banks gain on Spain's plans for cajas
* Delhaize rises on results, peer Metro gains
By Joanne Frearson
LONDON, Jan 21 (Reuters) - European shares rose on Friday as Spain's plans to part nationalise its debt-laden savings banks boosted banking stocks, while forecast beating results from U.S. bellwether General Electric also improved market sentiment.
The pan-European FTSEurofirst 300 index of top shares closed 0.8 percent higher at 1,148.32 points recovering after two-days of losses, though ended off the day's high as some investors took profits ahead of the weekend.
"The biggest risk to the European economies is the macro politics in the peripheries, short-term this has improved and the equity markets are now playing catch up," Philip Isherwood, head of equity strategy at Evolution Securities said.
A source familiar with the matter said the government would force debt-laden regional savings banks to become conventional banks, while Deputy Prime Minister Alfredo Perez Rubalcaba said Spain would step up plans to improve the solvency and credibility of its cajas.
Spain's IBEX 35 index rose 1.8 percent, while Spanish banks BBVA and Banco Santander gained 3.4 percent and 3.8 percent respectively.
Outside Spain, other banks were also performing well, with the STOXX Europe 600 Banks up 1.1 percent.
Royal Bank of Scotland soared 6.5 percent after an industry source said Britain's Treasury are in talks over RBS's possible early exit from the government asset protection scheme that insures the bank's riskiest assets.
Franco-Belgian financial group Dexia jumped 3.9 percent after it said it was finalising a funding agreement with the banking arm of France's La Poste.
Market sentiment was also given a boost after General Electric, which is considered a bellwether for corporate America reported better-than-expected quarterly earnings. "Companies are beating expectations and fundamentally the economic story is that we are going to see upgrades to forecasts. I expect a continued positive picture for equities," Isherwood said.
DELHAIZE/METRO RISE
Retailers also performed well. Belgian supermarket group Delhaize gained 2.6 percent after it reported like-for-like sales in Belgium which doubled consensus expectations late on Thursday.
German retailer Metro were 2.2 percent higher boosted by the upbeat figures from Delhaize.
Technical analysts said the market had potential to advance further.
"Notwithstanding the weakness in other European markets, the Euro STOXX 50 has been quite resilient and is still within striking distance of recent highs, which is consistent with the bull trend it has been displaying for eight months," said Bill McNamara, technical analyst at Charles Stanley.
"It appears to be rising within the confines of a bull channel, which is indicating the possibility of a resistance around current levels. Although on a broader view, critical resistance is in the region of 3,000 and 3,030."
The Euro STOXX 50 was up 1.5 percent at 2,970.56 points. Across Europe, the FTSE 100 index was 0.5 percent higher, Germany's DAX was up 0.5 percent and France's CAC 40 gained 1.3 percent.
The Peripheral Eurozone Countries Index was 2.2 percent higher. (Additional reporting by Atul Prakash; Editing by Jon Loades-Carter)