UDPATE 1-A400M buyers, EADS inching toward deal -french min

* Purchasing nations eye accord this week - defence min

* Buyers, EADS 'moving closer together' - defence min

* Merkel, Sarkozy likely to discuss A400M on Thursday

PARIS/BERLIN, Feb 1 - The countries buying the Airbus A400M military transport plane hope to reach a deal with aerospace and defence group EADS <EAD.PA> this week on how to cover the programme's soaring costs, France's defence minister said.

Herve Morin said the seven nations and the parent of planemaker Airbus plan to meet in the coming days to try to save the project after talks became bogged down over who should pay for billions of euros of budget overruns.

"I feel that the nations and EADS are moving closer together rather than further apart today," Morin told a press conference on Monday.

In Berlin, a spokesman for the defence ministry said the German government was "interested in a solution".

Asked if the ministry could imagine the project being scrapped, he said: "The defence minister has repeatedly said what's at stake is finding a solution as far as possible."

Engine problems and delays have pushed the home-grown European troop and armoured vehicle transporter 11.2 billion euros over budget, casting a shadow over 10,000 jobs.

Last week, the European nations offered to put 2 billion euros of extra funds into the A400M. Two sources familiar with the talks said EADS had put in a revised funding request for 4.4 billion, down from 5.2 billion at first. Both requests had been rejected.

German business daily Handelsblatt said on Monday that the German government was raising pressure on EADS over the A400M.

Citing industry sources, Financial Times Deutschland said Spain had warned that abandoning the project could trigger calls to repay state aid for EADS unit Casa and engine maker ITP.

France's Morin added that the A400M was likely to come up in discussions between German Chancellor Angela Merkel and French President Nicolas Sarkozy at a summit in Paris on Thursday. (Reporting by Elizabeth Pineau in Paris and Sarah Marsh in Berlin; Writing by James Regan; editing by John Stonestreet)