PARIS, Nov 12 (Reuters) - The French government on Tuesday approved IntercontinentalExchange Inc's takeover of stock market operator NYSE Euronext but urged French market players to step in to preserve Paris as a financial centre.

The merger, worth some $10.9 billion, has been completed and is set to be followed next year by the spin-off of NYSE's European arm Euronext, which operates the Paris, Amsterdam, Brussels and Lisbon stock exchanges.

Sources have told Reuters that Dutch and French regulators were seeking to prevent Euronext from falling into foreign hands, and that France's main banks had been approached to take a large stake in the bourse.

In a statement late on Tuesday, French Finance Minister Pierre Moscovici said he approved the ICE-NYSE merger, but stressed the need for Euronext to have a federal, European management that would preserve the standing of Paris as a financial hub.

Moscovici endorsed a report by Thierry Francq, former chief of French stock market regulator AMF, recommending that ICE set up a group of core shareholders holding a stake of at least 25 percent in Euronext and representing the interests of France, Belgium, the Netherlands and Portugal.

"Only a locally rooted stock exchange operator can adequately address the needs and specificities of its client base," the report said, adding that thousands of high-value jobs were at stake within France's financial "eco-system".

"The presence of a strong and dynamic bourse in Paris is also an absolute precondition to sustaining France's influence in setting the agenda of European and international financial regulation," it noted.