The China Securities Journal, citing an unnamed source within the Chinese bank, said the Singapore government-backed investment company "will buy a 5.0 percent stake at the price of its initial public offering."

The report also said the BOC, China's second-largest commercial lender, had completed preparations for its listing in Hong Kong and will submit its application to the Hong Kong Stock Exchange at the beginning of 2006.

The bank's spokesman, Wang Zhaowen, declined to confirm either the listing or the investment by Temasek.

"We dont have anything new to say about the issue now," Wang told AFP. "Theres no specific timetable for the listing."

The South China Morning Post (SCMP) had reported this week that Temasek would pay a higher price for one quarter of its two billion US dollar investment in BOC.

The Hong Kong newspaper said that under a revised pact, aimed at deflecting domestic criticism that the shares were being sold too cheaply, Temasek would be permitted to buy 5.0 percent of BOC for 1.5 billion US dollars.

These would be new shares but purchased before the bank makes its initial public offer in Hong Kong next year, the report said.

Temasek would then pay another 500 million US dollars for additional shares at the time of the IPO, the report said. Those shares would be at a significantly higher price.

Under an original deal announced in early September, Temasek was to have acquired a 10 percent stake in BOC for some 3.1 billion US dollars.

Temasek was also supposed to invest a further 500 million dollars to buy additional BOC shares during its initial public offering, inital reports said.

The revised deal was approved by the State Council, or cabinet, last week, according to the SCMP.

The BOC's major stakeholder, Central Huijin, had reportedly opposed the original deal out of concern that Temasek might gain too much influence over the domestic banking sector.

Temasek owns more than 5.0 percent of another one of China's four biggest commercial lenders, China Construction Bank.

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