General Electric (GE) strengthened its position in the battle for the power arm of French group Alstom yesterday with a pledge to create 1,000 jobs in France and recognition from Paris that it had made a more acceptable offer.

GE chief executive Jeff Immelt promised the new engineering and manufacturing jobs within three years of a deal when he met French President Francois Hollande, sources said.

"Today we can see that GE's offer has been detailed, improved, strengthened," said an official at Hollande's office, adding, however, that there was still "some work to be done".

The comments signalled a change of tone from the French government, which had been heavily critical of the US conglomerate's $16.9 billion bid for Alstom's power arm for fear of the impact on French jobs and industrial know-how.

It had promoted instead a European tie-up with Germany's Siemens and even passed a decree earlier this month to give itself an effective veto on any deal.

Saxo Bank analyst Christopher Dembik said French Economy Minister Arnaud Montebourg appeared to be getting his way in forcing GE to come up with a better offer, though he warned other potential bidders for French firms might be deterred by the government's tactics.

"It's a clever game of poker in the short run for Arnaud Montebourg, but that could have harmful consequences in the medium and long run, particularly in relation to Anglo-Saxon investors who are wary of state intervention in economic affairs," he said.

"It's not unlikely that investors will now think twice before showing interest in a French industrial jewel."

Shares in Alstom rose as much as 1.9 per cent on hopes for progress towards a deal with GE. Alstom management and investors have welcomed the US company's bid, saying it would give Alstom cash to pay its growing debts and the critical mass it lacked in a difficult global power market.-Reuters