MOSCOW, September 4, 2008 (AFP) - British and Russian shareholders fighting for control of their joint venture TNK-BP could end their feud as soon as Thursday, Russian newspaper Vedomosti and the London-based Financial Times reported.

Quoting unnamed sources on both sides of the dispute, Vedomosti said a deal could be announced after a meeting on Thursday between BP chief executive Tony Hayward for the British side and key Russian shareholder Mikhail Fridman.

'If all goes well,' the two sides could announce the signing of a memorandum of understanding, Vedomosti quoted a source as saying.

The proposed deal involves replacing TNK-BP's British chief executive Robert Dudley by an independent figure -- a key demand of the Russian shareholders -- and a public floatation of up to 20 percent of the company.

The 50:50 ownership split between BP and the Russian shareholders would remain unchanged, Vedomosti and the FT online reported.

BP declined to comment on the reports when contacted by AFP in London.

TNK-BP, Russia's third largest oil producer, has been badly hit by the row which has seen much of the British management forced out by Russian immigration and labour officials.

Vedomosti quoted one expert as saying the company was currently undervalued by 40 percent on the markets.

The future of Dudley has been a particular bone of contention and he was forced to leave the country in July complaining of harassment.

The row has aggravated already strained diplomatic relations between Britain and Russia.

TNK-BP is said to account for a quarter of BP's global output,