German state of Lower Saxony considers stake in VW's Osnabrueck plant, Capital reports

BERLIN, July 13 (Reuters) - The German state of Lower Saxony is considering taking a stake in Volkswagen's Osnabrueck plant, business magazine Capital reported on Monday, citing sources within the state government.

The state is ready to support the plant's transition from automotive to defence production by taking a stake - an arrangement that is being viewed as a potential model for other VW plants whose future is under discussion, Capital reported.

Volkswagen has been in talks with defence companies, including Israel's Rafael, over future prospects for Osnabrueck, where production is currently scheduled to end next year.

A Volkswagen spokesperson would not comment on the report. The state government's economy ministry was not immediately available for comment.

(Writing by Miranda Murray; editing by Matthias Williams)