Spanish utility Gas Natural said on Tuesday it had not done a deal with Algeria's Sonatrach to let the gas supplier take a stake in the firm of up to 10 percent, but talks to resolve the pair's legal spat continued.

"The talks with Sonatrach continue," a spokeswoman told Reuters in a telephone interview. "There is nothing agreed."

On Tuesday, financial daily Cinco Dias had said Gas Natural would carry out a capital hike to allow Sonatrach to take a stake in it, putting an end to the pair's dispute.

Citing company sources, Cinco Dias had said the deal had the approval of shareholders Repsol and La Caixa.

Gas Natural and Sonatrach are in talks to try to reach a settlement over a court ruling obliging Gas Natural to pay Sonatrach up to 2 billion euros in retroactive gas prices.

Cinco Dias said as well as a payment in shares, a cash payment would be made under the terms of the deal.