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Strong sales boost Renault shares as tensions with France simmer

By Laurence Frost and Dominique Vidalon

PARIS (Reuters) - Renault shares (RENA.PA) powered to a seven-year high on Friday as forecast-beating quarterly sales overshadowed signs of growing tensions with the French government over its influence on the carmaker.

Sales jumped 13.7 percent to 9.39 billion euros (£6.74 billion) in January-March, with a recovery in Europe's long-suffering autos market more than making up for a collapse in Russian demand and weak emerging economies.

However, the strong performance comes amid signs of tensions with the French state, which is seeking to increase its voting rights at the business -- something which Renault has warned could endanger the "survival and success" of its alliance with Japanese carmaker Nissan .

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Two people with knowledge of the matter told Reuters on Thursday that French Economy Minister Emmanuel Macron had written to Renault boss Carlos Ghosn to defend the government's position.

They said the April 21 letter was shared with Renault board members and interpreted by some as a warning against retaliation.

Renault credited recent models including the Clio sub-compact and Captur mini-SUV for a 9.9 percent rise in European registrations in the first quarter that outpaced the broader market. The company also raised its 2015 European market growth forecast to 5 percent from 2 percent.

At 0915 GMT, its shares were up 4.3 percent to 97.65 euros, having climbed earlier to 99.19 euros, their highest since December 2007.

Exane BNP Paribas analysts said the first-quarter sales were about 9 percent above the consensus forecast.

"(It's) very rare to see deviations of this magnitude against consensus on a quarterly revenue number given unit sales data is already disclosed," they added.

Renault said the upturn gathered pace in March, with mid-market brands such as its namesake cars posting strong gains, while sales of its no-frills Dacia models -- which rose strongly during the financial crisis -- slowed.

The carmaker's global registrations rose a more modest 0.8 percent, held back by weaker economies in South America and particularly Russia, where registrations have plunged under the weight of international sanctions and a lower, volatile rouble.

The weaker euro accounted for 1.3 points of a 14.3 percent gain in automotive division sales, lifting the value of overseas revenues when converted back.

Sales to other carmakers -- including alliance partner Nissan and Germany's Daimler (DAIGn.DE) -- rose 6.7 percent.

Barclays analysts said the French government's move to increase its influence at Renault, which will be voted on by shareholders at an April 30 meeting, could turn out favourably if it led to a restructuring in the alliance with Nissan and fuller cooperation between the two carmakers.

"We think many investors are focused on the risk of increased government involvement at Renault post-30 April, but we think few have fully understood the positive catalyst this might provide for a change in structure of the Renault-Nissan Alliance," they wrote in a research note.

(Editing by Emelia Sithole-Matarise and Mark Potter)