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Porsche, which owns 51% of VW, is facing an uphill battle in trying to gain even greater control of the company.

FRANKFURT (Reuters) -- Porsche's squabbling owners are set to discuss an investment by Qatar in the next two weeks, a milestone which could change the dynamics of a Porsche/Volkswagen merger, people close to the talks said.

A decision on Qatar's entry may come even before key family members are set to gather at a Volkswagen supervisory board meeting on July 15, and a day later for the centenary celebrations at VW unit Audi, the people said.

Spokesmen for Porsche and VW declined to comment.

A successful investment from Qatar could strengthen Porsche Chief Executive Wendelin Wiedeking's negotiating hand as he tries to strike a deal with VW.

Without it Porsche will struggle to prop up its finances and may have little choice but to succumb to a reverse takeover from VW, Europe's biggest carmaker.

Porsche, which owns 51 percent in VW, is seeking an outside investor after amassing 9 billion euros ($12.62 billion) in debt during a bungled attempt to dominate Volkswagen.

Struggling under the debt, Porsche was forced to abandon efforts to raise its VW stake to 75 percent and is now seeking to bolster its finances before negotiating a deal to form an "integrated" company with VW.

Porsche's chances of setting the terms of any deal are looking slim. Wiedeking has so far failed to secure 1.75 billion euros in loans it wants from commercial banks or from KFW, a state-controlled bank in Germany.

He is pinning his hopes on striking a deal with Qatar but his plans may be scotched by Porsche's owners and by VW's ability to set the terms of a deal.

Qatar "could help Porsche avoid a bigger financial problem," Credit Suisse analyst Arndt Ellinghorst said. "But ultimately any deal has to be supported by VW and Lower Saxony."

Lower Saxony, VW's home state, is VW's second-biggest shareholder with a blocking minority stake of around 20 percent.

Porsche is heavily dependent on Volkswagen, making it hard for the Stuttgart-based auto maker to walk away from a deal.

Volkswagen is one of Porsche's most important suppliers, delivering or assembling components for a third of all Porsche cars, including the body and engine for the four-door Panamera and Cayenne offroader models.

Porsche is also financially dependent on VW after receiving a 700 million euro loan to help pay down its debt.

Porsche has said it is close to securing an investment from Qatar. But a deal hasn't been signed, mainly due to uncertainty over whether the clans that own Porsche would for the first time cede voting rights to an outsider, one source said.

Qatar's ability to strike a deal depends in large part on Ferdinand Piech, a key member of Porsche's owning families who has signaled his opposition toward any outside investor in Porsche.

The Piech family controls a stake of just under half in Porsche Automobil Holding SE, but can veto significant decisions. Porsche's owners need a 66.6 percent or even 75 percent consensus for approving important decisions, Ferdinand Piech said in an interview in Stern magazine in April 2008.

This effectively gives the Piech family the ability to veto a deal between Qatar and Porsche. Piech and his brother Hans Michel together hold just over 26 percent of Porsche.

Qatar has submitted a non-binding offer to invest in Porsche voting shares and in VW share options held by Porsche, but details are not yet fixed over pricing and exact stakes, according to one person close to the deal. Porsche owns share options which control a stake of at least 20 percent in VW.

Qatar is approaching a potential investment in Porsche as a passive financial investor and is open to investing in either company, the person said.

Ferdinand Piech, also the chairman of Volkswagen, has proposed that Porsche sell its sportscar business to Volkswagen, a move opposed by his cousin and Porsche Chairman Wolfgang Porsche.

One way for Piech to pressure his cousin is to block cooperation deals between Porsche and VW, a factor which makes it difficult for Porsche to go it alone.