* Would back purchase of stake in itself or in Porsche
* VW ordinary shares gain 2.9 percent, Porsche shares end flat
(Adds details, background)
HAMBURG, Germany, June 8 (Reuters) - Volkswagen would support the Gulf state of Qatar taking a substantial voting stake in either its debt-laden parent Porsche or in VW itself, Europe's largest carmaker said on Monday.
"In principle we view this positively since it would accelerate the process to form an integrated group with 10 brands," a VW spokesman said.
Porsche originally sought to build its voting stake up to 75 percent in order to take full control over VW via a so-called domination agreement, but had to give up on its plans early last month.
In the course of Porsche's share purchases, it racked up a mountain of debt that it could not refinance as planned using VW's own cash pile and is now looking for a way to bail itself out by combining with financially solid Volkswagen.
Due to Porsche's opacity -- highlighted by its surprise application for a 1.75 billion euro ($2.42 billion) in state loans via German development bank KfW -- Volkswagen has warned any talks over a deeper alliance would have to respect its fiduciary responsibility to insulate itself from any unknown financial risks.
As a result, discussions between the two revolve around creating an "integrated auto group with 10 brands", a phrase all sides use that leaves open plenty of room for speculation as the various parties wrestle over the ultimate outcome.
VW's chairman, Ferdinand Piech, in particular is locked in a struggle for control with his cousin Wolfgang Porsche, who chairs the holding company that owns Porsche's sports car business and 51 percent of VW's ordinary shares.
Focus magazine said that Qatar was considering either taking a stake in the listed company Porsche Automobil Holding via a capital increase, or in VW directly by buying VW voting stock held by Porsche's derivative trading partners.
Hussein al-Abdullah, the executive director of the sovereign wealth fund Qatar Investment Authority (QIA), declined to comment on Monday as did its Minister of State for Foreign Affairs, Ahmad al-Mahmood.
VW SHARES RALLY
VW ordinary shares rallied on Monday on speculation that Qatar could eliminate a stock overhang by scooping up the more than 20 percent of VW voting shares owned by Porsche's counterparties to cover their exposure on certain derivative contracts.
Porsche's 9 billion euro net debt pile as well as the risk of significant accounting writedowns on its VW stake should its counterparties flood the market with their shares have reduced its negotiating leverage with VW.
As part of efforts to bolster its balance sheet, the sportscar maker could find out by June 23 whether its application for a loan at KfW was approved.
"Finding an investor would certainly help Porsche to avoid more critical liquidity issues. However, it is hard to see how it could generate upside for the share price," analysts at Sal. Oppenheim said.
The bank said Porsche's share price already reflects the assumption that it would find a buyer for 25 percent of VW at the strike price of certain put options as well as investors' belief Porsche would escape relatively unharmed.
"We think that is highly unlikely and reiterate our negative stance on the stock," it wrote, sticking to its "sell" rating and 20 euro fair value.
Porsche shares closed broadly unchanged at 47.00 euros while VW ordinaries ended up 2.9 percent at 247.88 euros. VW's preferred stock closed down 1.1 percent at 53.10 euros while the DJ Stoxx European autos sector index ended 0.8 percent lower. ($1=.7230 Euro) (Reporting by Jan Schwartz and Christiaan Hetzner, additional reporting by Dania Saadi in Dubai and Ulf Laessing in Riyadh; Editing by Greg Mahlich and Jon Loades-Carter)